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Tax Submissions for the Independent Contractors Now

Many people have doubts about the income tax return for freelancers. After all, do these self-employed entrepreneurs really need to report all their income in that online system of the IRS?

The answer is: it depends on your situation

In some cases, it is mandatory for the independent contractor to declare income tax. In others, it is up to your availability. Want to know more about it? You still haven’t had your doubts answered? Then continue reading the text and understand the question once and for all:

When is income tax for freelancers mandatory?

Most people know that filing income taxes is mandatory for anyone who has a formal job. For freelancers, however, the situation is not exactly the same.

In this case, only those entrepreneurs who have taxable income greater than R $ 28,123.91 in the base year are required to declare the tax, or who have received non-taxable income of more than R $ 40,000.00. These values ​​are still valid for the declaration in 2020. For this is important.

In exemption situations, it is important to remember that the independent contractor is not completely free from the actions of the Tax Authorities. He also undergoes an inspection of his collections, in order to prove that his income was compatible with the non-declaration of the document.

It is essential that the self-employed professional does not hide his financial data. Street vendors, plastic artists, artisans, freelancers and private teachers are examples of professionals who can be in serious trouble with the Tax Authorities, if they omit the earned income.

Why declare income tax?

The income tax can be a very beneficial document for freelancers who want to obtain financing or even open a bank account at an agency.

With the document, the financial institution will be aware of the person’s monetary reality, which can greatly facilitate the granting of credit in these places. Having this document in hand will make the entire financial process much simpler, both for the individual and for the financial entity. Even people who are not required to declare their income, therefore, end up filling and submitting the declaration annually.

What happens if I don’t declare IR?

Some people are tempted to omit or not to declare their absolute income tax returns. It is important to know that this attitude can bring several problems to the life of an independent entrepreneur. The main one is the fine that is charged for tax evasion, which is R $ 165.74 for people who are up to date with the payment of taxes. If this is not the case, 1% will be calculated each month on the amount of tax that must be paid, reaching a maximum of 20%.

In addition, there are administrative and criminal penalties for those who do not declare income tax. And the seriousness of the charges varies according to the representativeness of the offense committed.

Greg Jones: Greg's blog posts are known for their clear and concise coverage of economic and financial news. With a background as a financial journalist, he offers readers valuable insights into the complexities of the global economy.