Hi! I’m currently studying for a foundation degree in computing. I do some graphic designs on the side and I’m starting to get more into things like commissions and selling art/designs. I’m intrigued and was hoping someone here could answer - if I started to do this on the side seriously, would the money I make on it count as tax? I’ve looked around at some sites like this income calculator but can’t find much on secondary income. Anyone here know better than I do and can share their experiences?
You would need to research taxes and taxable income in your specific state/area. Where I live, I have to claim any earnings over $400 in a year and I have to know who I need to charge tax to when I sell something. If you’re taking on small business sales, you do need to be aware of your tax responsibilities.
Totally depends on where you are. In the US, if you make over $600, you have to include it in your income tax return. But you can also deduct most of your business expenses from it.
They only apply to the business though. You can’t deduct your expenses from your overall income, just the business income.
As KitchWitch said, you’ll have to research your area.
I agree with both KitchWitch and DocPixel about researching local regulations.
If you’re in the U.S., however, most any earned income (with a few exceptions) is taxable to whatever extent the IRS rules specify. It might even be subject to state income and sales tax depending on your state. No matter how much (or little) freelance work you do, as far as the IRS is concerned, you’re operating a business, and that business is subject to the rules of the tax code.
I had a tax specialist once tell me “to the IRS, there is no such thing as side income. Only income. And they want a piece of everything.”