I started doing freelance translations for foreign clients a few months ago and received the payments directly into my account. I have no idea how I'm supposed to declare this to the IRS this year. Do I need to ask for some kind of documentation from my clients or how exactly does this work?
The most important thing is to register yourself as self-employed with the Tax Authority before filing, because without that you can't declare anything on your tax return.
As for documenting your clients, honestly you don't need to go around asking for W-9s or TINs (that's more of an American thing with their system) - what matters is that you keep your own records of the payments you've received, bank statements work perfectly as proof.
Then, when you file your return, you'll report those earnings as self-employment income, and honestly it'd be a good idea to consult an accountant or call the Tax Authority to clarify details about withholding tax (some clients might deduct it before paying, others won't), because that varies depending on which country your clients are from.
Oh man, international freelancing is really complicated. So yeah, you do need to declare all that stuff to the IRS, and usually you ask the client for a W-9 form (if they're in the US) or equivalent documentation depending on where they're from, but honestly the best move is to talk to an accountant who deals with this stuff because every country has its own rules and you might end up needing an EIN or some other paperwork that I honestly wouldn't know how to explain properly.
I did some freelance design gigs for foreigners last year and it was a mess, so it's totally worth getting professional help so you don't get screwed with taxes later.
You have to declare all of this, without exception, because the IRS wants to know about any income that comes into your account.
Most international clients won't ask you for anything official - they just transfer and that's it - but you have to keep your payment receipts (screenshots of transfers, emails, invoices you sent) because if the IRS comes knocking, those records are what save you.
The trick that a lot of people don't do is open a separate bank account just for freelance work, it makes everything much simpler to track and to show your accountant when it's time to file your taxes.
Basically you do need to declare it, but it depends a bit on where your clients are from. If they're from the US, they're gonna want a W-9 or a TIN (tax identification number) from you so they can pay you properly. Now, if they're from other countries, things get a little looser, but you still need to declare your earnings to the IRS anyway.
What you do is keep all the documentation you have - bank statements, emails with the agreed amount, invoices if you issue them, basically any proof that you received that money. With the IRS you're gonna declare it as self-employment income, and you'll probably need to fill out a Schedule C (if you're in the US) or the equivalent, depending on how you're set up. The truth is the IRS wants to see everything that comes in, so the more organized documentation you have, the better it is for you.
One thing a lot of people don't do but should is set aside money already to pay taxes, because if you're getting a lot of freelance income, by the end of the year you could owe a considerable amount. Some people create a structured business to make it clearer, but being honest, if it's just been a few months still, you can try to sort everything out when you file. I recommend talking to an accountant who understands international freelancers, because they know exactly how to make this less complicated and not leave room for problems later.
actually W-9 is more of a thing for the person paying in the US, not the person receiving! you do need to report everything to the IRS, yes, but what really matters is keeping your payment proofs (bank statements, invoices you sent, emails with agreements) because that's your evidence! a lot of people forget this part and then it gets messy during an audit. before you file, have a chat with an accountant who works with international freelancers, because depending on how much you earned and where your clients came from, there might be other obligations (like registering as self-employed) that nobody explained clearly here!
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