Tax implications for part-time freelancer

What is the name of your state? Virginia

Hi all,

Looking for some help with tax issues in the US (state of VA). I have my regular web developer day job, but also design and maintain web sites in my spare time. I offer a web hosting service too as a reseller for a local company. I don't make a terrific amount of money doing this, and I'm not sure whether I should be estimating my taxes for 2004 now or just wait until next year when I file. Do I submit the earnings as "other income"? Can I offset software purchases and other 'business' items against my earnings? As you can tell I'm fairly new to tax laws in the USA - I recently moved here from the UK. I currently use TurboTax to file my annual return.

Any help would be appreciated,

Thanks,
Steve

[abezon]

You can wait until next year to pay any balance due. However, save some money so you can pay.

Expenses would include: computers to host the site, web connection prices, software, advertising, furniture, miles you put on your car driving to compucare for yet another $5 part, and possibly a home office deduction if you work from home.

For a home office deduction, you must use some are of your home regularly and *exclusively* for business. Keep track of utilities, repairs, rent, etc. If you don't use the area exclusively for business (personal time on the computer, e.g.) keep track of how much time you are doing personal stuff on the business computers.

You might consider taking the H&R Block tax class, which usually starts near the end of August. It will give you a basic understanding of the American tax system (radically different from UK, I hear), as well as help you identify potential business expenses. You can also deduct the class fee as a business expense.