Question 1

Does Washington state have income tax?

Accepted Answer

Washington has no state income tax on earned income, making it attractive for freelancers and tech workers. However, Washington does have a capital gains tax of 7% on gains over $250,000 from the sale of stocks and bonds.

Question 2

What taxes do Washington freelancers need to pay?

Accepted Answer

Washington freelancers pay federal income tax (10-37%) and self-employment tax (15.3%). There's no state income tax. However, Washington has a Business & Occupation (B&O) tax that may apply to some freelance businesses, typically at a rate of 1.5% of gross receipts.

Question 3

Is Washington's B&O tax applicable to freelancers?

Accepted Answer

Potentially yes. Washington's B&O tax applies to businesses with more than $100,000 in gross income. The rate varies by activity — service businesses typically pay 1.5% of gross receipts. Many small freelancers fall below the threshold, but check with Washington's Department of Revenue.

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