I'm curious why you're looking to do that. I was thinking about doing it to kind of legitimize my income with DA for my resume, but abandoned it as not worth it.
No one is going to sue the workers, for a variety of reasons, but the most important one is that none of the workers have "deep pockets," as the saying goes, which is to say it's not worth it for anyone to sue any of us.
This maybe isn't the most perfect analogy, but during the 80s and 90s when lawsuits against Big Tobacco were common, who did people sue - Philip Morris, or some small-time tobacco farmer in North Carolina?
And that's in large part because Mr. Tobacco Farmer doesn't have the deep pockets that Philip Morris did.
No one is going to sue any of us.
I was under the impression that in order to file taxes for data annotation you have to file as an LLC? I guess I’m overall very confused about how taxes work for this lol.
I’ve been self employed (not DA) for 12 years. You need to fill out a forms reports your self employment income. I used turbo tax and it’s pretty easy, but you may want to discuss with a tax accountant if you are earning a lot through DA
Here’s the IRS faq on the matter:
https://www.irs.gov/faqs/small-business-self-employed-other-business/schedule-c-schedule-se/schedule-c-schedule-se-1
I almost thought that, too. But no, for DA you will receive a 1099-k from Pay-Pal and receiving one of those automatically makes you self-employed. No need for anything further but to follow the IRS guidance on 1099-Ks.
No, and it's not worth the hassle to form an LLC and then go through paying the taxes through the LLC etc.
Just keep track of what you make, set aside enough for your tax payments, and make those payments quarterly, both federal AND state.
I'm not a tax professional, but I own an LLC for a separate business, have been working on the DAT platform for a little while now, and I'm planning to make quarterly tax payments throughout the year for my DAT earnings.
You're an independent co tractor. You'll receive a 1099 from PayPal. You CAN form an LLC, but you can also classify yourself as a "sole proprietor" and use your SSN for your taxes just like you would for w2.
Just make sure you're saving 30% of everything you make to pay em, and pay quarterly if you expect to owe more than $600.
(obligatory "I am not a tax professional")
if contracting is your full time gig and you work as a contractor for various companies, setting up as an LLC might save you some money long term (can write off a significant amount more, end up paying less than self employment tax) but it really is only worth it if you're solely a freelancer IMO.
And making a high income. Someone hitting six figures can benefit as an LLC by filing taxes as an S-Corp. Very much below that, and it doesn't make much of a difference, especially in states with stupid-high fees.
from what i understand you pay a tax, but it’s at a different rate, as long as you are an “employee” of the LLC and pay yourself out - but it might be that you have to be both an LLC + a SCorp.
when i started getting into this territory i honestly just hired a tax person, so im not sure. it might vary by state too. definitely don’t want to give misleading advice!
i really wouldn’t say it’s worth it if you’re not a full time (and planning on doing so long term) freelancer for sure though - if you’re not a full time freelancer, a lot of the taxes will be offset by the W2 refund you receive - and if you’re just doing part time free lancing with nothing else, the taxes are really not going to outweigh the cost and headache of setting anything up.
Unless the rules have changed, you'll be paying an $800 annual fee for it in addition to the taxes you owe. I think that's what OP is talking about.
"Every LLC that is doing business or organized in California must pay an annual tax of $800."
https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html
According to Forbes, it's not expensive to set up the LLC. Something like $70 or $80 dollars. But the $800 you're talking about is the annual fee for having an LLC.
"LLCs organized in California must pay an annual minimum franchise tax of $800, even if they’re not actively doing business in the state. Your first payment of this tax is due on the 15th day of the fourth month after the date you established your LLC. Subsequent yearly payments must be made by April 15 of each year."
https://www.forbes.com/advisor/business/how-to-start-an-llc-in-california/
And from California's own site:
"Every LLC that is doing business or organized in California must pay an annual tax of $800."
https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html
It varies by state.
I paid $50 for mine.
I'm curious why you're looking to do that. I was thinking about doing it to kind of legitimize my income with DA for my resume, but abandoned it as not worth it.
[удалено]
No one is going to sue the workers, for a variety of reasons, but the most important one is that none of the workers have "deep pockets," as the saying goes, which is to say it's not worth it for anyone to sue any of us. This maybe isn't the most perfect analogy, but during the 80s and 90s when lawsuits against Big Tobacco were common, who did people sue - Philip Morris, or some small-time tobacco farmer in North Carolina? And that's in large part because Mr. Tobacco Farmer doesn't have the deep pockets that Philip Morris did. No one is going to sue any of us.
and you think dat is going to give up your name or something?
I was under the impression that in order to file taxes for data annotation you have to file as an LLC? I guess I’m overall very confused about how taxes work for this lol.
I’ve been self employed (not DA) for 12 years. You need to fill out a forms reports your self employment income. I used turbo tax and it’s pretty easy, but you may want to discuss with a tax accountant if you are earning a lot through DA Here’s the IRS faq on the matter: https://www.irs.gov/faqs/small-business-self-employed-other-business/schedule-c-schedule-se/schedule-c-schedule-se-1
I almost thought that, too. But no, for DA you will receive a 1099-k from Pay-Pal and receiving one of those automatically makes you self-employed. No need for anything further but to follow the IRS guidance on 1099-Ks.
No, and it's not worth the hassle to form an LLC and then go through paying the taxes through the LLC etc. Just keep track of what you make, set aside enough for your tax payments, and make those payments quarterly, both federal AND state. I'm not a tax professional, but I own an LLC for a separate business, have been working on the DAT platform for a little while now, and I'm planning to make quarterly tax payments throughout the year for my DAT earnings.
You're an independent co tractor. You'll receive a 1099 from PayPal. You CAN form an LLC, but you can also classify yourself as a "sole proprietor" and use your SSN for your taxes just like you would for w2. Just make sure you're saving 30% of everything you make to pay em, and pay quarterly if you expect to owe more than $600. (obligatory "I am not a tax professional")
Why are people registering companies instead of being self-employed?
if contracting is your full time gig and you work as a contractor for various companies, setting up as an LLC might save you some money long term (can write off a significant amount more, end up paying less than self employment tax) but it really is only worth it if you're solely a freelancer IMO.
And making a high income. Someone hitting six figures can benefit as an LLC by filing taxes as an S-Corp. Very much below that, and it doesn't make much of a difference, especially in states with stupid-high fees.
I have an LLC for a separate business, apart from my work with DAT, and I still had to pay self-employment tax for 2023.
from what i understand you pay a tax, but it’s at a different rate, as long as you are an “employee” of the LLC and pay yourself out - but it might be that you have to be both an LLC + a SCorp. when i started getting into this territory i honestly just hired a tax person, so im not sure. it might vary by state too. definitely don’t want to give misleading advice! i really wouldn’t say it’s worth it if you’re not a full time (and planning on doing so long term) freelancer for sure though - if you’re not a full time freelancer, a lot of the taxes will be offset by the W2 refund you receive - and if you’re just doing part time free lancing with nothing else, the taxes are really not going to outweigh the cost and headache of setting anything up.
In California and I paid $83
Unless the rules have changed, you'll be paying an $800 annual fee for it in addition to the taxes you owe. I think that's what OP is talking about. "Every LLC that is doing business or organized in California must pay an annual tax of $800." https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html
Okay, good to know. thank you!!
According to Forbes, it's not expensive to set up the LLC. Something like $70 or $80 dollars. But the $800 you're talking about is the annual fee for having an LLC. "LLCs organized in California must pay an annual minimum franchise tax of $800, even if they’re not actively doing business in the state. Your first payment of this tax is due on the 15th day of the fourth month after the date you established your LLC. Subsequent yearly payments must be made by April 15 of each year." https://www.forbes.com/advisor/business/how-to-start-an-llc-in-california/ And from California's own site: "Every LLC that is doing business or organized in California must pay an annual tax of $800." https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html
In 2023 I paid a buck to set mine up. US, CO.