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Dancer: the rules are much the same everywhere - only the details are different.
As a self-employed person, you get treated as a company, more or less. Here in NZ, we're supposed to pay provisional tax - based on an estimate of how much taxable income you are likley to have over the coming year. These are due at approximately 4 month intervals (the US might be 3 months, but that's a minor difference). At the end of the tax year, you get a refund or make up the difference. If the difference you have to pay is large enough, IRD will jump on you, claiming you had use of the money you owed them. But you can't claim that THEY had the use of the money if you get a refund.
The idea is that, if everyone pays the provisional tax when it is due, the government coffers don't have to borrow as much, which cuts down on the interest they might have to pay.
Usually,when there is a minimum, it works in the sense that,if you earn more than this minimum, then you have no option but to work their way. If less than the minimum, then it's your option whether you pay the provisional tax or not.
So, it's not a matter of how many companies you work with, it's how much YOU earn that matters. Naturally, if there is only one company, IRS would want to tell you how much you should pay (In NZ, though, if you freelance for only one company, you might be regarded as an employee, rather than as self-employed.)
Talk to your tax accountant - if you don't have one, then FIND one - it can save you a small fortune!
posted by
L.E.Gant
on June 16, 2005 at 9:08 PM
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