If either your freelance work and/or side online business create any significant liability for you, you might consider forming a Limited Liability Company (LLC). In any event, you'll need to track the income and corresponding (eligible) expenses for your business(es) and report that for tax purposes. If it's just you operating the LLC, it will be considered a "disregarded entity" and the net income will flow through to you the same as if you operated as a sole proprietor. Assuming you operate as a sole proprietor or single-member LLC, you'll report business activity on Schedule C (profit or loss from business) and you'll also need to file Schedule SE and pay self-employment tax (15.3%) if net earnings are $400+ from your business(es). There are certain situations where it may be beneficial to choose to be taxed as a corporation (S corp or C corp), but that's beyond the scope of a quick answer here. Treat this as general information and talk with a CPA or business attorney if you need specific advice on your situation. I hope that helps.
First of all in order to make your life simpler, you separate your business from your personal expenses either by forming an entity, or just opening up an account for business. It will make you and your accountant's job that much simpler come tax time. If you're going to make more than $10,000 doing freelance, you might want to consider for me an LLC and having a tax as an S-Corporation to save money in taxes. Craig W Smalley EA - Admitted to Practice before the Internal Revenue Service
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