Like many other US states, Nebraska levies a sales tax on the purchase and use of tangible personal property. However, there has been an increase in debate concerning whether or not digital goods and services should be subject to sales tax as a result of their popularity. Both yes and no to this question apply to Nebraska.
Digital items are now recognized as tangible personal property by the Nebraska Department of Revenue and are therefore liable to sales tax. This covers things like downloaded or streamed music, movies, and digital books. Conversely, digital services like website creation and consultation are exempt from Nebraska’s sales tax.
If you work as an independent contractor in Nebraska and offer consulting services, you must include your income on your tax return. As self-employment income, this income needs to be recorded on Schedule C (Form 1040). Since you might be able to deduct some costs from your taxable income, it is crucial to keep complete records of all earnings and outgoings from your consulting business.
Since you must pay both the employee and employer halves of Social Security and Medicare taxes, calculating taxes as an independent contractor can be a little trickier than it is for regular employees. 15.3% is the current self-employment tax rate, with 12.4% going to Social Security and 2.9% going to Medicare. Federal income tax and any applicable state and local taxes are additional fees that must be paid.
The answer to the question of whether or not independent contractors must pay GST is no, as the Goods and Services Tax (also known as GST) is a tax that is only enforced in a select number of nations, including Australia and Canada. However, other taxes, such sales tax or self-employment tax, might apply to independent contractors in the US.
If your annual income as an independent contractor in Nebraska is under $75,000, you might not need to register for sales tax. However, to make sure you are in compliance with all applicable tax regulations, it is still crucial to maintain track of your earnings and outlays and to speak with a tax expert.
In conclusion, digital services are exempt from Nebraska’s sales tax, but digital items that are classified as tangible personal property are. Independent contractors who perform consulting services must file tax returns and pay self-employment tax on their earnings. To make sure that you are in compliance with all applicable tax rules, it is crucial to keep correct records and get advice from a tax expert.
Without additional context, I am unable to respond to your query specifically as an AI language model. But generally speaking, you might need to charge sales tax on your services if you run a service-based firm in Nebraska. You should seek advice from a tax expert or the Nebraska Department of Revenue to ascertain your precise tax liabilities.