Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Becoming a Freelancer and other Freelance Design topics.
If you are a freelancer, you are considered a sole proprietor. Other terms commonly used include self-employed, independent contractor and freelancer. Income and expenses related to your self-employment is reported on your 1040 Schedule C. Your clients may send you a Form 1099-MISC in January or February to report total payments for the previous year. Form 1099-MISC is like a W-2. It is used to report income you received for freelance work. The IRS also gets a copy of your 1099s.
*It's a good idea to keep any income not related to your freelance work separate so there is no confusion during tax time.