If you are a Freelancer, are you considered a sole-proprietor? I believe a SP in CA does not have to file papers to the state if using your own name. You just need a business license.
This link may be of help to you... http://www.associatedcontent.com/article/140427/tax_deductions_for_freelance_writers.html
Thanks for the replies. Ok, according to that article it is saying freelancer is a sole-proprietor. Does every freelancer register and get a license? I don't think so. Isn't a freelancer more like a temp and the contacts are drawn up from the client? This is why the terminology can be mixed....
The answer may depend on your local law. The county in which I live, does not require any formal steps to be considered a sole proprietor. They also do not require that we charge tax on consultation services.
I agree with this. That is the way I handle my freelance work. I receive a form W-9 from companies I do freelance work for, and in turn I receive a 1099 at the end of the year, so I can pay all my lovely taxes on the money I've earned.
>The county in which I live, does not require any formal steps to be >considered a sole proprietor. I don't believe in my county either. I could put my name on a card and if people want to hire me, then i would be 'freelancing'. If people give me a straight money deal, then i would be responsible to pay the taxes like a SP. If an independent contractor, then they would deduct the taxes..... So, then...a freelancer is a sole proprietor who is registered or not registered (in the county if required) who does his/her own taxes. An independent contractor is one who is like a temp where the client pays and deducts tax and you don't have to worry about that.... I had thought independent contractor was a freelancer but maybe that is where my 'terminology' is confused. Does that sound right? If so, then its is a matter of who is deducting your taxes.
I started paying quarterly last year. It's less of a kick in the gut at the end of the year and you avoid the $80 penalty.