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Freelancers can now save a few bucks this year on their taxes, thanks to recent local and national law revisions. Part of President Obama’s stimulus bill includes a $400 tax break for the self-employed who make under $75,000 in adjusted gross income — probably the great majority of such workers in the Bushwick area. Married earners can double the savings.
In 2009, the Freelancer’s Union, an organization that advocates for the self-employed in New York, won a major victory over a mere six-month period for the city’s independent contractors by successfully lobbying the state to kill the Unincorporated Business Tax, which by seeking to close tax loopholes hit “1099-ers” first personally, and then as a business. The Union says members may now save up to $3,400 in taxes.
In conjunction with the city’s Dept. of Consumer Affairs, The Freelancer’s Union offered free tax preparation for those who made under $58,000, but the sessions are now full. Hopefuls may sign up for the waiting list, but April 15 is nearing.
State Sen. Martin Malavé Dilan reminded his constituents to claim the federal Making Work Pay tax credit, and praised the program.
“This tax credit will go a long way to help families afford added expenses, such as health care and retirement plans, that self-employed individuals pay for out of their own pockets,” said the senator in a press release.
Several Bushwick residents were unaware of the credit.
Jamie Dwyer, creative director for a company in Bushwick, doubts it will knock much of his total IRS bill this year. But he might feel better splurging on some “much needed upgrades.”
“Maybe I’ll get a replacement for my ’04 iBook — it doesn’t even play YouTube,” he said.
Workers on payroll also receive the credit, but it is handled by their employer and will reduce the withholding amount instead of coming back as a return.
For more information on the Making Work Pay tax credit and to find the proper forms, visit irs.gov.
