Do I need to pay US federal tax?
Thread poster: Kwei Chang
Kwei Chang  Identity Verified
United States
Local time: 20:49
English to Chinese
+ ...
Oct 18, 2004

In this forum, people say translations do not need to pay state tax, how about federal tax? Is translation considered a consultant service? if not, what catagory does it belong?

[Subject edited by staff or moderator 2004-10-18 13:38]


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Rosa Maria Duenas Rios  Identity Verified
Local time: 21:49
Clarification Oct 18, 2004

Kwei Chang wrote:


In this forum, people say translations do not need to pay state tax, how about federal tax? Is translation considered a consultant service? if not, what catagory does it belong?


Hi Kwei,
What I have read in the Proz.com forums, and the way it is done in the United States, is that translation services are not subject to a sales tax (which is a state tax). Nevertheless, traslators do have the obligation to pay both State and Federal taxes, unless they happen to live in one of the few states that do not collect state taxes (such as Florida), in which case they are only subject to Federal tax.

[Edited at 2004-10-18 13:25]


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TNT TRANSLATION  Identity Verified
United States
Local time: 20:49
English to Korean
You still pay state income tax Oct 18, 2004

I am in MO, US. I do not have to collect state sals tax (check other Forum http://www.proz.com/topic/25355). But When I file my income tax, I have to pay federal and state income tax.

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Henry Hinds  Identity Verified
United States
Local time: 19:49
English to Spanish
+ ...
Income Tax Oct 18, 2004

You have to report your income and pay any income tax due, which for someone free-lance is classified as "self-employment income". In addition you must also pay "self-employment tax" which is Social Security for the self-employed. The latter is just a flat percentage starting with the first dollar.

Most states charge income tax also, but Texas is another one that does not. But the Federal Government has its hand in your pocket no matter where in the USA you may be.


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mboerner
English to French
Federal Taxes Oct 19, 2004

Not only does the Federal Government have "its hand in your pocket no matter where in the USA you may be," but also no matter where in the world you may be if 1) you are a US citizen, or 2) the money you earned was generated in the United States. To be fair, the US is the lowest taxed populace in the developed world, so I don't know why anyone would complain about US taxes.

mboerner, Ll.B.; Ll.M. Tax.


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