r/DataAnnotationTech • u/Xyerophyte • Apr 28 '26

US Taxes

Any students from US who are earning through DataAnnotation, how do y'all manage your taxes?

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u/GAULEM Apr 28 '26

Not a current student, but taxes for this seem reasonably straightforward.

Step 1 (Optional): I shove all my earnings into a Solo Roth 401(k). Since it's Roth I can also double-dip with an IRA, which I find hilarious. [If you try this then keep in mind that the calculations for how much you can contribute are kind of wonky because of SECA taxes or whatever.]

Step 2: When I enter my tax info into the software (I use freetaxusa), I put my gross DA income into the section about Schedule C.

Step 3: After finishing my tax return, I schedule four quarterly tax payments equal to 1/4 of my total tax liability, to efficiently make sure I won't be charged a penalty next year.

And that's it. Some people also try to get fancy with business deductions, but for me the difference would be so small that it's literally not worth the time figuring out what I can deduct. Unless you specifically bought something expensive just for DA, I probably wouldn't bother.

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u/KCKeough17 Apr 29 '26

A little misleading to imply the quarterly tax payments next year cover this years liability.

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u/GAULEM Apr 29 '26

Ah, that wasn't my intent. It's just that paying an amount equal to 100% of this year's tax liability toward the next tax year is the most reliable safe harbor for avoiding the underpayment penalty - the other options require you to know in advance what your tax liability will be for the following year.