- #AVERAGE CHARGE FOR FREELANCE BOOKKEEPING SERVICES SOFTWARE#
- #AVERAGE CHARGE FOR FREELANCE BOOKKEEPING SERVICES PROFESSIONAL#
- #AVERAGE CHARGE FOR FREELANCE BOOKKEEPING SERVICES DOWNLOAD#
#AVERAGE CHARGE FOR FREELANCE BOOKKEEPING SERVICES PROFESSIONAL#
Freelancers should consult with a tax professional regarding how sales tax should be applied to their specific product and service offerings. Conversely, providing maintenance services for computer hardware in some jurisdictions (such as New York) is taxable.
#AVERAGE CHARGE FOR FREELANCE BOOKKEEPING SERVICES DOWNLOAD#
Work such as website development that produces downloadable electronic files or the ability to download files may be subject to sales tax (again, depending on the state in which the sale is being made), but website maintenance would generally be considered a service on which sales tax would not apply.
#AVERAGE CHARGE FOR FREELANCE BOOKKEEPING SERVICES SOFTWARE#
You may also be considered as having a tax nexus if you have affiliates in a state that you work with to sell your goods.įact #3: The type of product or service you offer matters when it comes to sales tax.įor many freelance professionals, especially those working in the programming and website development industry, the line between what is considered a tangible good and what is considered a service for the purpose of charging sales tax can be quite fuzzy, unless you are a tax professional.Īs a rule of thumb, digital work that produces a tangible output such as pre-programmed, non-customizable software is usually taxable. You can also have a presence through a representative in a particular area. You can have a direct presence by having a store location in a state, hold inventory within a state, or by living or working in a particular jurisdiction. Your nexus may be based on your business presence in a state, however, in some states you have to register by county or city. For professional services, it is generally safe to assume that your sales are tax-exempt unless your state’s regulations rule otherwise, but it is still a good idea to double check and become familiar with the sales tax regulations of the state(s) in which you do business.įact #2: Freelancers should determine their tax nexus and responsibilities.įrom a tax perspective, nexus means that your business has established a presence in an area. However, if you ship these goods to another state where you do not have a tax nexus (see the explanation of tax nexus below) you do not have to collect sales tax on sales where goods are delivered to an out-of-state address. If you sell physical goods and ship them to someone in your same state, then you have to collect (charge the buyer) sales tax and pay that tax to your state. For example, in New York State the assumption should be that goods being sold are taxable unless they are specifically exempt in the state’s regulations. Here are some facts about sales tax and use tax to help you determine how you should handle these obligations as they apply to your freelance business.įact #1: Sales and use tax regulations vary by state.Įvery state has different requirements for sales tax and use tax. Use tax is usually applicable to purchases of tangible personal property and services that are made outside of the state in which they will be ultimately used. Sales tax generally applies to retail sales of certain tangible personal property and services. One area of taxation that is often misunderstood by those who are self-employed are the rules applying to sales tax and use tax. As a freelance professional, the burden for ensuring you are in compliance with all tax regulations falls squarely on your shoulders.
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