Freelance Graphic and Web Design Tax?

How to calculate tax for a web design?

• Hi, I have recently moved to the states and not so familiar with the taxing system here.I have developed a website for one of my friends(food importer) and have received a check from him and under the check it's written for website design.Do you know if i should pay any taxes for such a friendly matter.although the website will be used commercially. And if so,Please tell me where i can find more information about this tax...thank you

• Answer:

  Your income from developing the web site for your friend is taxable, earned income. If the amount is over $400, it is also subject to self employment (SE) tax. SE tax is nominally 15.3%. Your income tax is based on how much your total income is for the year. I ran across this site yesterday and haven't had the time to thoroughly test it, but it appears to be accurate. http://www.moneychimp.com/features/tax_calculator.htm It only does federal taxes, but since you didn't specify where you live, I can't advise you. Nearly every state in the US has an income tax. A few states (NY, PA, OH, MD) have cities or counties that also have an income tax. If your friend is based in the US, he or she must file a Form 1099 early next year if he paid you $600 or more. The Internal Revenue Service, which is a part of the US Treasury Department, is responsible for enforcing the US tax law and collecting taxes. The web site is http://www.irs.gov however, the site is probably going to confuse someone who is new to the US. (I've been a tax professional for about 20 years, and the IRS site confuses me sometimes.) Wikipedia has a lot of information and is present a little better. http://en.wikipedia.org/wiki/Income_tax_in_the_United_States I hope this helps. Gary