I just have one question about freelancing. Is freelancing legal? I heard from my cousin if I receive money online I'll have to pay extra taxes and such although there isn't any law about it in my county? So my question is freelancing legal and do you pay any extra taxes or anything for freelancing and receiving money that way?
Are we supposed to guess where you live? In the US, all income is subject to taxes, including freelancing.
If you make money, you are required to follow your country's laws regarding reporting and taxation for that money. The reason people outside the US are required to fill out a w-8 form to participate in US-based networks or offers is because the advertiser/merchant/network has to produce that form to prove that they paid that money to someone outside of the country for their own tax purposes. It protects the program, it does not affect the affiliate/freelancer. So, it's 100% dependent on where you live, whether or not it's legal, and/or how it's taxed. Your country may have specific laws regarding certain types of work, licensing, etc.. that do in fact make "freelancing" as an individual with no registered company or affiliation illegal, I guess? I can't imagine what conversation prompted this question. Perhaps someone outside the US who did get extra taxes withheld by a program or network after failing to complete a w-8? That's possible. If they can't get the correct information they have to withhold taxes just in case you are required to pay them at the end of the year.
The thing is that I want someone to receive paymant instead of me on PayPal and give me the money in person, and I don't want that person to pay any extra taxes because of me, that's why I'm asking this. I live in southern Europe where people don't know what freelancing is so there's noting about taxes. If anyone lives in Europe I would some more information about taxes and freelancing.
When you freelance your client pays you directly and does not deduct tax. You however are required to file a tax return and report your income. You will likely have to pay tax on this income. I don't know about European countries but in Canada there is a Goods and Services (GST) tax. Freelancers must add this to their bill (if the client is also in Canada) , collect it, then remit it to the gov't. European countries may have similar setups.
I live in Europe and I can assure you that internet earnings are not only taxable they are also liable to VAT.
I live in the Uk and I need to pay tax on earnings if I choose to take the legal route and declare earnings.
If you want to be legal on it and be an obedient citizen of your country you go follow the rules and file taxes right on your freelance earnings. However, if you opt not to, it's all up to you. Not unless you have registered yourself as a freelancer or something that the government knows that you are earning money through freelance work. As for me, I tried to be a good citizen and was so excited to pay taxes. So, I apply for a TIN number and even the people within the government agency don't even know how to classify me. Too much of being a good citizen. My country does not even know how big they can earn on taxes on freelancers like me but hey they are so ancient they don't know this type of source of income exists.
Most freelancers do their work illegally and under the law, without paying taxes. In most countries, including the United States, you are subject to income tax. I wouldn't recommend operating illegally without paying income taxes or the IRS will come after you! You don't want to get on Uncle Sam's bad side!
Here's the thing, in the US, there is a threshold where you become responsible for paying taxes. I believe in most cases, if you make more than $600 from a single source, that source is required to report it to the IRS. I don't like the IRS.
Well no, I'm not registered as a freelancer, I'm at collage, and the money I earn from freelancing from a legal source is less then 200$. So, correct me if I'm wrong, if I'm registered as a freelancer then I have to pay taxes?
@mentalhead: I mean come to think of it, how on earth will the government learn that you are doing freelance work, right? Not unless someone will divulge information about you and what you do for a living. As in my country, there is no form that I can fill up to further classify where I did earn my money or some sort. This is the reason why I just stay on a low profile and has a part time job in an office. This is the only way, I can be a good citizen and pay up taxes. Quick note: It's just simple really... be honest = declare your earnings = pay taxes keep it to yourself = live a low profile = all earnings are yours
Same problem in this county too. I just don't know where to register as a freelancer. Anyway, thanks for the info, it was just what I needed .