understand taxes when geting money from a project built long time ago plus my full time job
You need to register as self-employed with HMRC (it is perfectly fine to be self-employed and employed by an employer at the same time, in exactly your kind of situation). Then, when the income arrives you will need to declare it on your yearly tax return.  HMRC information about registering for self-employment and declaring the income is here: https://www.gov.uk/working-for-yourself/overview There's a few extra hoops if your clients are outside the UK; the detail depends on whether they are in the EU or not. More details about this are here: https://www.gov.uk/online-and-distance-selling-for-businesses/selling-overseas .
"Why are they calling it freelance? It used to be called self-employed.  Freelance used to mean low wage or no wage gigs and was all about the experience and connections you made which would help propel you into what you wanted.   Now people are talking about it as though its the way of the future?  As an accountant, I understand the long term value of labor subcontractors. Pretty much. . . if you think your job can be done at home, it can be subcontracted out to somebody else who does not have to be a full time employee. Kinda like the, ""Can a robot take my job,"" sorta thing?  In summary, genuinely good/original talent is wasted on ""freelance,"" because the creator isn't given the tools to make his/her best work when that work is finding them. . . and lining up one after the other." "This is not a full answer and I have no personal finance experience. But I have a personal story as I did this. As Vicky stated Another point: there are various schemes available to help first time   buyers. By signing up for this, you would exclude yourself from any of   those schemes in the future. I did this for my dad when I was 16 or so. I am in Canada and lost $5,000 first time buyers tax rebate. As long as many other bonuses like using your rsps for your first home. I also am having a fair amount of trouble getting a credit card, because even though I am only a part member of the mortgage they expect you to be able to cover the whole thing. So when the banks look at my income of say $3000 a month they say ""3000 - rent(500) - mortgage(3000)"" You make $-500 a month. I then explain that I do not actually pay the mortage so it is not coming out of my paycheck. They do not care. I am responsible for full payments and they consider it used." Besides spending all your money, and then not being able to find a new job when you want to and where you want to, the biggest risk is the lack of health insurance.  Research your options regarding your existing insurance under COBRA. It will cover your preexisting conditions at the full price of the insurance, that means without the contribution from your employer. Make sure you have fully investigated the options to understand your out of pocket maximums, and the full price of insurance.  You will also have to understand the maximum amount of time you are covered under COBRA. If your unemployment goes beyond that period of time, you will have to get individual insurance. You need to avoid a gap in coverage or when you do get a new job, the insurance may not cover some preexisting conditions. Before NASA send astronauts to the space station for months, they give the astronauts a full physical, including a visit to the dentist and eye doctor. It would be advisable to do the same before announcing to the employer that you plan on quitting. the insurance will generally transition to the COBRA program at the end of your last work day. Because both of you work you could do the transition is phases. One would quit, then spend their time getting the sabbatical site established. The insurance would come from the employed spouse during this transition.  Some employers do have sabbatical programs where they  will ease your transition if you are going to work on your education full time, or work for a charity. They will need you to return at the end of an agreed time period. Even if they don't have a official sabbatical period they usually have a reemployment plan. If you return before the time period expires, usually one or two years, you aren't considered a new employee. That can be important for years of service calculations for a pension, vacation and sick leave earned, 401K matching. "Another thing that insurance companies try to do with these types of vehicles is to promote the ""cash value"" of the policy. The longer you participate in the policy, the more your cash value goes up (assuming the investments perform reasonably well). The selling point is that at any time you can take out part of that cash value without impacting your insurance policy. A lot of people see that benefit as being the same as either putting the money in the bank or investing it, when actually they could do better if they did either of those things themselves. One true advantage of the whole term policy is that if you should fall on hard times and are not able to work, the premium payments can be taken out of the cash value. That way even if you can't make the monthly payments, the insurance policy basically pays for itself. I actually experienced this myself many years ago after I lost my job and had some health issues. I was out of work a long time, but my life insurance never lapsed. That in itself made it worthwhile for me." "No, you can't deduct any of that. What they're talking about is a flexible spending plan, otherwise known as ""Use it or lose it"" money.  You choose to put pre-tax dollars into a restricted fund.  This money is not taxed, in fact technically, it's not even income.  You can only spend out of that fund to buy parking, tolls, transit tickets, things like that.    Any money not used for those purposes in a suitable time period evaporates.   Gone, and irrecoverable.  You can't even take the loss as a tax deduction! You have to set this account up with your employer.   You can't just dig up your old transit and parking receipts and stick those on your Schedule A.   Take 3 people.   As you can see, Fran is shooting herself in the foot. This is where these plans can go wrong." how is it double taxation when you didn't start off with that extra $100?  it's double taxation if they taxed you on the total amount you pulled out of the market, not the profit you made.   explain the math on your last part, please. "So you are paying taxes on your contributions regardless, the timing   is just different. I am failing to see why would a person get an IRA, instead of just   putting the same amount of money into a mutual fund (like Vanguard) or   something like that. What am I missing? You are failing to consider the time value of money. Getting $1 now is more valuable to you than a promise to get $1 in a year, even though the nominal amount is the same. With a certain amount of principal now, you can invest it and it will (likely) grow into a bigger amount of money (principal + earnings) at a later time, and we can consider the two to have approximately equivalent value (the principal now has the same value as the principal + earnings later). With pre-tax money in Traditional IRA, the principal + earnings are taxed once at the time of withdrawal. Assuming the same flat rate of tax at contribution and withdrawal, this is equivalent to Roth IRA, where the principal is taxed at the time of contribution, because the principal now has the same value as the principal + earnings later, so the same rate of tax on the two have the same value of tax, even though when you look at nominal amounts, it might seem you are paying a lot less tax with Roth IRA (since the earnings are never ""taxed""). With actual numbers, if we take a $1000 pre-tax contribution to Traditional IRA, it grows at 5% for 10 years, and a 25% flat rate tax, we are left with $1000 * 1.05^10 * 0.75 = $1221.67. With the same $1000 pre-tax contribution (so after 25% tax it's a $750 after-tax contribution) to a Roth IRA, growing at the same 5% for 10 years, and no tax at withdrawal, we are left with $1000 * 0.75 * 1.05^10 = $1221.67. You can see they are equivalent even though the nominal amount of tax is different (the lower amount of tax paid now is equivalent to the bigger amount of tax later). With a taxable investment which you will not buy and sell until you take it out, you contribute with after-tax money, and when you take it out, the ""earnings"" portion is subject to capital-gains tax. But remember that the principal + earnings later is equivalent to the principal now, which is already all taxed once, and if we tax the ""earnings"" portion later, that is effectively taxing a portion of the money again. Another way to look at it is the contribution is just like the Roth IRA, but the withdrawal is worse because you have to pay capital-gains tax instead of no tax. You can take the same numbers as for the Roth IRA, $1000 * 0.75 * 1.05^10 = $1221.67, but where the $1221.67 - $750 = $471.67 is ""earnings"" and is taxed again at, say, a 15% capital-gains rate, so you lose another $70.75 in tax and are left with $1150.92. You would need a capital-gains tax rate of 0% to match the advantage of the pre-tax Traditional IRA or Roth IRA. After-tax money in Traditional IRA has a similar problem -- the contribution is after tax, but after it grows into principal + earnings, the ""earnings"" part is taxed again, except it is worse than the capital-gains case because it is taxed as regular income. Like above, you can take the same numbers as for the Roth IRA, $1000 * 0.75 * 1.05^10 = $1221.67, but where the $471.67 ""earnings"" is taxed again at 25%, so you lose another $117.92 in tax and are left with $1103.75. So although the nominal amount of tax paid is the same as for pre-tax money in Traditional IRA, it ends up being a lot worse. (Everything I said above about pre-tax money in Traditional IRA, after-tax money in Traditional IRA, and Roth IRA, also applies to pre-tax money in Traditional 401(k), after-tax money in Traditional 401(k), and Roth 401(k), respectively.) Regarding the question you raise in the title of your question, why someone would get contribute to a Traditional IRA if they already have a 401(k), the answer is, mostly, they wouldn't. First, note that if you merely have a 401(k) account but neither you nor your employer contributes to it during the year, then that doesn't prevent you from deducting Traditional IRA contributions for that year, so basically you can contribute to one or the other; so if you only want to contribute below the IRA contribution limit, and don't need the bigger 401(k) contribution limit, and the IRA's investment options are more attractive to you than your 401(k)'s, then it might make sense for you to contribute to only Traditional IRA. If you or your employer is already contributing to your 401(k) during the year, then you cannot deduct your Traditional IRA contributions unless your income is very low, and if your income is really that low, you are in such a low tax bracket that Roth IRA may be more advantageous for you. If you make a Traditional IRA contribution but cannot deduct it, it is a non-deductible Traditional IRA contribution, i.e. it becomes after-tax money in a Traditional IRA, which as I showed in the section above has much worse tax situation in the long run because its earnings are pre-tax and thus taxed again. However, there is one good use for non-deductible Traditional IRA contributions, and that is as one step in a ""backdoor Roth IRA contribution"". Basically, there is an income limit for being able to make Roth IRA contributions, but there is no income limit for being able to make Traditional IRA contributions or for being able to convert money from Traditional IRA to Roth IRA. So what you can do is make a (non-deductible) Traditional IRA contribution, and then immediately convert it to Roth IRA, and if you did not previously have any pre-tax money in Traditional IRAs, this achieves the same as a regular Roth IRA contribution, with the same tax treatment, but you can do it at any income level." If you intend to flip this property, you might consider either a construction loan or private money. A construction loan allows you to borrow from a bank against the value of the finished house a little at a time. As each stage of the construction/repairs are completed, the bank releases more funds to you. Interest accrues during the construction, but no payments need to be made until the construction/repairs are complete.  Private money works in a similar manner, but the full amount can be released to you at once so you can get the repairs done more quickly. The interest rate will be higher. If you are flipping, then this higher interest rate is simply a cost of doing business. Since it's a private loan, you ca structure the deal any way you want. Perhaps accruing interest until the property is sold and then paying it back as a single balloon payment on sale of the property. To find private money, contact a mortgage broker and tell them what you have in mind.  If you're intending to keep the property for yourself, private money is still an option. Once the repairs are complete, have the bank reassess the property value and refinance based on the new amount. Pay back the private loan with equity pulled from the house and all the shiny new repairs.