Complete the right forms for freelance work.
If you are a freelance artist, you will need to file a 1040 federal tax return with a Schedule SE, which is for Self-Employment Tax, and Schedule C, which is Profit and Loss from Business. You will be responsible for Social Security and Medicare taxes when you file if you have not filed quarterly estimated taxes throughout the year. Filing your taxes on time and sending any payment along to the government is important and needs to be done by April 15.
Instructions
Schedule C
1. Fill out the Schedule C Profit and Loss from Business. Any expenses that relate only to your freelance business can be used as a deduction to lower your tax liability. For an artist, such expenses can be paints, brushes, pencils or any other supplies that you use professionally. In Part II of the form, fill in any amounts that apply to the business.
2. Complete both pages and enter the amount from line 31 on line 12 of the 1040 form and line 2 of the Schedule SE form if you have a profit. If you have a loss, enter that amount in parentheses on each line to indicate a negative amount.
3. Send along the Schedule C with your completed 1040 form.
Schedule SE
4. Fill out the Schedule SE. The first section is your personal information. In the second section, you will enter the profit or loss from the Schedule C. If you have a loss, you are done and will not owe any Social Security or Medicare taxes, or federal taxes. If you have a profit, you must complete the second section.
5. Multiply your profit by 0.9235 and enter that amount on line 4. If this amount is less than $400, you will owe nothing and are done. If the amount is more, move to line 5 where you will multiply line 4 by 0.153 (if income is less than $106,800, or multiply by 0.029 if income is more than $106,800) and enter that amount on line 5 and line 56 of the 1040 form. To complete the form, multiply line 5 by 0.50 and enter that amount on line 6 and on line 27 on the 1040 form.
6. Send the Schedule SE form along with the 1040 and Schedule C.
1040 Form
7. Fill out the form 1040. You will already have some amounts written in for the Schedules SE and C. Add any other information you may have, including any 1099 forms or W-2 forms.
8. Take any credits and deductions that you have coming on the 1040. If you made any quarterly estimated tax payments throughout the year, enter those amounts on line 62. Complete the payment section if you have any other payments.
9. Figure how much you owe or if you have a refund coming in the last section.
10. Send the 1040 form, Schedule SE, Schedule C and any other supporting documents required to the address for your particular state listed on the last page of the 1040 Instruction Booklet. Send a check for any money owed at this time or the Internal Revenue Service will send a bill for the amount due with interest and penalties if after the filing date.
