As a freelancer, independent contractor, or consultant, you have to consider a variety of tax issues, including ways to lower your tax bill. The income you receive from consulting is considered normal income and is added to any other income you earned during the year. This amount is then taxed at your marginal tax rate, which increases as your income increases. The Internal Revenue Service (IRS) recommends making quarterly tax payments based on your estimated tax liability.
Sales of tangible personal property are subject to New York sales tax, unless specifically exempt. While it can be complicated territory, learning to calculate and pay self-employment taxes for your consulting work is a small price to pay for the freedom of being your own boss. Many consultants find dealing with taxes on consulting fees confusing and frustrating, especially when it comes to model contracts or work return templates. Fortunately, being a freelancer, consultant, or independent contractor also offers many new ways to cut your tax bill.
A full-service accounting firm & Tax Consultancy located in the heart of Brooklyn, New York can help you navigate the complexities of taxes for consultants. Now that you know how to get into consulting, it's time to find out how taxes work for consultants.
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