Freelancing in the US - Need to register anywhere?
Thread poster: Ben O

Ben O  Identity Verified
United States
Local time: 19:08
English to German
May 1, 2015

Hello all, I'm new to ProZ and wanted to say hi! I was also wondering if someone could give me some quick advice about one aspect of working in the US, or point me to the respective resources. I’ve been browsing the forums here but couldn’t find exactly what I was looking for.

I'm a German citizen and I’ve been working as an in-house translator for English to German in Canada (since late 2010). I recently moved to my wife in the US. Everything on the immigration side has been sorted out, and I’m allowed to work as I please (just waiting for my SSN to be mailed to me).

Now my question is, in order to do freelance work in the US, do I have to register somewhere, like the IRS? Does any institution need to know what I’m doing for a living, or will I just have to file my income tax next year (possibly jointly with my spouse)? Or would I need to register as a “small business”?

Sorry if this is a silly concern, I just want to make sure there won’t be any unpleasant surprises down the road.
Thanks and have a great weekend everyone!


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Triston Goodwin  Identity Verified
United States
Local time: 17:08
Spanish to English
+ ...
Nope :) May 1, 2015

There are several places that could be helpful, such as a chamber of commerce, any local translator/interpreter groups, small business groups, and so on. Don't forget Google business!

When it comes time for taxes, I just check the self-employed box and fill in my information. With any luck, the IRS will be abolished soon ^_^


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Kevin Fulton  Identity Verified
United States
Local time: 19:08
German to English
Various formalities May 1, 2015

Assuming you're allowed to work legally, agencies may ask you to submit a W-9 form which contains your name, address and social security number. They need to keep a record of this in case they are audited by the IRS. Your state chamber of commerce can tell you whether you need a business license (most states do not), but you may have to register with the local jurisdiction (in Michigan it's the county) if you plan to do business under an assumed name (such as "Benno Translations"). If you make more than $600 in a calendar year from an agency/customer, you will receive a 1099 form which you will use when preparing your annual tax statement. There should be at least one translators' association in your state, and you can get information from one of the members regarding state-specific requirements.

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The Misha
Local time: 19:08
Russian to English
+ ...
Welcome to the good, old (relatively) unregulated US of A May 1, 2015

Triston Goodwin wrote:

With any luck, the IRS will be abolished soon ^_^


Uh-huh, and Mickey Mouse will be our next president (or rather his old lady). Otherwise, it's just like the previous commenter said. When you are doing your taxes next year, tell the software you are self-employed (which it will assume anyway once you start plugging in all those 1099 forms), and it will take you right through it. Piece of cake. Starting from your second year, the IRS will expect you to pay quarterly estimated taxes, but even that is more of a suggestion than a hard rule.


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Patrick Porter
United States
Local time: 19:08
Spanish to English
+ ...
Don't forget quarterly income tax payments May 1, 2015

If you don't make quarterly payments of your income tax for the year, the IRS will add penalties and interest at the end of the year. Depending on the amount you earn, these amounts could be trivial, but you might as well keep every dollar you can. And if you do earn a significant amount they can add up.

Here's a link to the IRS site for more info on estimated payments:
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estimated-Taxes


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LilianNekipelov  Identity Verified
United States
Local time: 19:08
Russian to English
+ ...
If you want to work as a company May 2, 2015

you can register your company with the county clerk, and get an Employer's Tax Identification Number, or you can even start a corporation, but then you have to pay more corporate taxes, but you would not have to pay Social Security taxes. Better consult an accountant, though, about the taxes. This is more or less the difference.

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Laura Tridico  Identity Verified
United States
Local time: 19:08
Member (2006)
French to English
+ ...
What Patrick said... May 2, 2015

The U.S. is a great place to freelanice. There are few requirements, but you will need to make quarterly tax payments.

I also needed to pay a local tax in my county to operate a business, so check local requirements. That said, my tax paid was less than $100/year.

Laura


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Preston Decker  Identity Verified
United States
Local time: 19:08
Member (2013)
Chinese to English
Tax Planning May 3, 2015

Also keep in mind that as a sole proprietor you'll be paying both the employer and employee portion of your social security, medicaid, etc. taxes. This basically means we have to plan to pay an extra 7.5% or so more than an employee working for someone else.

The good news is you get to deduct business expenses. Look into opening a 401k if you want to protect some earnings from taxes for now.


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Ben O  Identity Verified
United States
Local time: 19:08
English to German
TOPIC STARTER
Thanks for all the advice May 4, 2015

Especially the quarterly payments was something I wasn't aware of. I just have no clue at all how much I will be able to make. But this would only be applicable the second year (as The Misha pointed out)? I should probably get the help of a tax adviser, at least for my first year, since I also had an income in Canada from January to March. I’m not sure if I should register as a business. At what point would that start to be beneficial?

We currently live in New Jersey and I’d really like to be able to talk to a freelancer who works here, regarding all these details. But I couldn't find a translators association for this state (the closest one seems to be http://www.nyctranslators.org/). Would you recommend joining the ATA?

Again, thank you all for the replies!


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