Working as W2 employee and freelancing - confused about W4 form for side gigs

The confusion is totally understandable! There's a misunderstanding here that's important to clear up. As a freelancer in the production industry, you wouldn't be a "W4 employee" - you'd likely be an independent contractor receiving a 1099-NEC at year-end, not a W-2. The W-4 form is only for employees to specify withholding from regular paychecks. As a freelancer/independent contractor, your clients typically won't withhold any taxes - that responsibility falls on you. You'll need to make quarterly estimated tax payments instead. For your situation, I'd recommend setting aside about 25-30% of your freelance income for taxes (federal, state, and self-employment tax). You can use the IRS Form 1040-ES worksheet to calculate more precisely. As for keeping your freelance work separate from your main job, that's completely fine! Your W-2 employer won't see your 1099 income unless you specifically show them your tax returns.

I was in exactly the same boat last year when I started doing weekend gig work while keeping my corporate job! The tax situation was confusing until I found taxr.ai (https://taxr.ai) which honestly saved me so much headache. I uploaded my pay stubs from both jobs and it calculated exactly how much I needed to set aside for taxes. The site helped me understand that as a freelancer I needed to make quarterly estimated tax payments (which I had no idea about before). It gave me personalized recommendations based on both income sources and even factored in the self-employment tax that I didn't know I'd have to pay.

Just wanted to update after trying taxr.ai - I'm actually really impressed! I was super skeptical as mentioned above, but it really did break down exactly what I needed to know for my situation. I've been working as a W2 employee at my day job and picking up design gigs on weekends. It showed me that I needed to set aside about 28% of my freelance income for taxes (higher than I expected), and explained the whole quarterly payment system in a way that finally clicked. The calculator factored in both income streams and showed me how they affect each other tax-wise. I've set up a separate savings account now where I'm putting 30% of each freelance check. Much better than my previous "hope for the best" strategy!

If you're having trouble reaching the IRS to ask tax questions about your situation (which is totally common these days), I used Claimyr (https://claimyr.com) and it was a game-changer. I waited on hold with the IRS for HOURS trying to figure out my W2 + freelance situation last year until someone told me about this service. They have this callback system that somehow gets you to an actual IRS person without the endless hold time. I was skeptical but you can see how it works here: https://youtu.be/_kiP6q8DX5c I finally got to speak with someone who walked me through exactly how to handle my taxes with multiple income sources and what forms I needed. Super helpful for complicated situations where you need official answers.

I need to eat my words from my comment above. After getting frustrated with trying to get answers about my tax situation with multiple income sources, I broke down and tried Claimyr. It actually worked exactly as advertised. I got a call back in about an hour and was connected directly to an IRS agent who walked me through how to handle my W2 job and side freelance work. They explained I needed to make quarterly estimated payments and how much to set aside based on my expected earnings. The agent also clarified that I don't need to worry about my main employer finding out about my side gigs through tax filings - that was a big relief. Worth every penny just for the time saved not being on hold!

Just a quick tip from someone who's been balancing W2 employment with freelance work for a few years: You can actually adjust your W4 at your main job to have EXTRA withholding taken out (in Box 4c) instead of making separate quarterly payments. I found this easier than dealing with quarterly payments. I calculated approximately how much extra tax I'd owe from my freelance work for the year, divided by my remaining paychecks, and put that amount in Box 4c as additional withholding. Worked like a charm!

Has anyone tried using a tax professional instead of all these online services? I felt so overwhelmed trying to figure out my W2 + side hustle situation that I finally just hired a CPA and it was the best decision ever. He helped me set up a system for tracking expenses (which btw you should DEFINITELY be doing as a freelancer) and calculated my quarterly payments.

Great question about expense tracking! I wish I'd known about this earlier. As a freelancer, you can deduct business expenses like equipment, travel to gig locations, professional development, and even a portion of your home office if you use it for freelance work. I started tracking everything in a simple spreadsheet - date, amount, description, and category. Things like camera gear, software subscriptions, gas for driving to shoots, even business meals can add up to significant deductions. The key is keeping receipts and being able to justify that each expense was necessary for your freelance work. For the film production gigs specifically, you might be able to deduct things like specialized equipment, union dues if applicable, professional memberships, and transportation costs. Just make sure to keep detailed records from day one - it's much harder to reconstruct everything at tax time!

This is such a common situation! I went through the exact same confusion when I started freelancing while keeping my day job. One thing that really helped me was opening a separate business checking account for all my freelance income and expenses - it makes tracking so much easier. Since you're in film production, definitely keep track of all your gear purchases, travel expenses to different shoot locations, and any professional development costs. I use a simple app on my phone to photograph receipts right when I get them so I don't lose anything. Also, don't forget about the home office deduction if you do any prep work or editing at home! Even if it's just a corner of your bedroom where you review scripts or do post-production work, you might be able to deduct a portion of your rent/utilities. Just make sure you're using that space regularly and exclusively for business. The quarterly payments seem scary at first, but once you get into the rhythm it becomes routine. I set up automatic transfers to my tax savings account every time I get paid from a gig - makes it painless!

I'm just getting into freelance work myself and this thread has been incredibly helpful! One thing I'm still confused about though - when you're doing quarterly estimated tax payments, do you pay based on what you've already earned that quarter, or do you try to estimate what you'll earn for the entire year and divide by 4? Also, what happens if you overestimate or underestimate your freelance income? I'm worried about either owing a huge penalty or overpaying by a lot. The uncertainty of freelance income makes it really hard to predict what I'll actually make for the whole year. Has anyone dealt with having really variable freelance income from quarter to quarter? Some months I might land a big project, other months might be slow. I'm not sure how to handle the estimated payments when my income is so unpredictable.

This whole thread has been super helpful for understanding the freelance tax situation! I'm in a similar boat - working full-time W2 and just started picking up some weekend photography gigs. One thing I wanted to add that I learned the hard way: make sure you're tracking your mileage for travel between gig locations! I didn't realize this was deductible until my CPA mentioned it. The IRS standard mileage rate for 2024 is 67 cents per mile for business use, so if you're driving to different film sets or locations, that can add up to significant deductions over the year. Also, for anyone just starting out, don't forget about business insurance if you're using expensive equipment. It's another deductible expense, and it protects your gear which is essential for your freelance income. I learned this after nearly having a camera stolen on a shoot! The separate business account advice is spot on too - it makes everything so much cleaner at tax time. I wish I had done that from day one instead of trying to separate everything later.

Just wanted to chime in as someone who made this transition a couple years ago! The advice about setting aside 25-30% is solid, but don't forget about state taxes if you're in a state that has them - that percentage might need to be higher depending on where you live. One thing that really helped me in the beginning was using the IRS withholding calculator (https://www.irs.gov/individuals/tax-withholding-estimator) after my first few freelance gigs. You can input both your W2 income and estimated freelance income, and it'll tell you if you need to adjust your W4 withholding at your main job or make quarterly payments. Also, since you mentioned TurboTax - they have a pretty good quarterly tax calculator tool that can help you figure out those estimated payments once you get a few paychecks under your belt. The key is not to stress too much about getting it perfect the first year - you're learning a new system and the IRS understands that. Just make sure you're setting aside something from each freelance payment and you'll be in much better shape than most people starting out! Good luck with the film work - it's such a fun industry to freelance in!

One thing I haven't seen mentioned yet is the importance of getting an EIN (Employer Identification Number) for your freelance work, even if you're a sole proprietor. While you can use your SSN, having an EIN makes you look more professional when clients ask for tax documents, and it adds a layer of privacy protection. You can apply for an EIN online directly through the IRS website for free - it literally takes about 10 minutes and you get it immediately. Some clients prefer working with freelancers who have EINs, and it makes the whole W-9 process smoother. Also, since you're in film production, consider joining relevant professional organizations like your local film commission or industry groups. The membership fees are tax-deductible business expenses, and they often provide valuable networking opportunities that can lead to more work. Plus, some offer resources or workshops on freelance business practices that could help with the tax and business side of things you're navigating. The learning curve feels steep at first, but once you get through your first year of managing both income sources, it becomes much more routine. You've got this!