Back when you were an indoor office worker, you probably just let your company deal with your taxes on your behalf. Working independently provides individuals with new opportunities and experiences. They spend more time on their passions, meet like-minded people, live in new places, and learn new things.
However, one of the drawbacks to freelancing is the freelance taxes that come with it, which means freelancers have to find ways to pay the government what they owe. Every year, tax season can be a daunting task for those who are self-employed.
By following a few simple steps, you can make tax time a breeze!
1. Tracking Your Expenses Throughout the Year
Throughout the year, keep track of all your income and expenses. This will make it much easier to prepare your tax return. Make sure to gather up all of your paperwork and put it in one place.
This includes your income statements, receipts, and any other records you need. Be sure to deduct all your expenses appropriately. This will make the self-employed tax process much easier.
Create a folder for all of your tax-related documents and put them in one place. This will be very helpful to find everything when you need it.
2. Knowing Which Expenses are Tax-deductible
When it comes to getting your freelance taxes done in a flash, knowing which expenses are tax-deductible can save you a lot of time and hassle. Some common expenses for freelancers include business-related travel, office supplies, and marketing costs.
Familiarize yourself with the types of expenses that can be deducted from your tax return. When it comes to deductions, simpler is better. Don’t try to deduct everything, just focus on the big ones.
This will help you to properly track your expenses and maximize your deductions.
3. Hire a Professional
As a freelancer, you are responsible for completing and filing your own taxes. This can be a daunting task, especially if you are new to self-employment. However, there are some simple steps you can take to make the process of preparing freelance taxes less overwhelming.
One of the best things you can do is hire a professional tax preparer on how to do freelance taxes. This will ensure that your taxes are done correctly and in a timely manner.
If you need help on how to do freelance taxes, consult tax professionals like WealthAbility to jumpstart your year-round process.
4. Use a Tax Software
If you are not comfortable hiring someone, there are many tax software programs available that can help you complete your taxes. These can help with the preparation of your freelance taxes. Some of these programs are designed specifically for self-employed individuals, while others are more general in nature.
This will make the process much simpler and faster. Tax software can be a lifesaver when it comes to preparing your taxes. It can help you keep track of your deductions and make filing a breeze.
Make sure to use a good tax software program to help you with the process. Use it to your advantage.
5. Planning Ahead for Next Year
Once you’ve gone through the tax preparation process, you’ll have a much better idea of what to expect next time around. This will help you get a jump start on next year’s taxes and make the whole process much smoother.
Keep good records, know which expenses are deductible, and don’t procrastinate. By following these tips, you can ensure that your taxes are done quickly and efficiently.
You can also keep a copy of your tax return from the previous year. This will help you estimate your tax for the coming year.
6. Stay on Top of Estimated Taxes
Self-employed taxpayers usually have to make estimated tax payments. To make sure you don’t underpay, review your tax situation every quarter and adjust your withholding or estimated tax payments, as needed.
Stay organized throughout the year so it’s much easier to pull everything together when it’s time to file. Keep good records of all your expenses. This will help you maximize your deductions.
Also, consider filing electronically. It can help you get everything done quickly and efficiently. It will also help you get your refund faster.
The earlier you start, the easier it will be. So, don’t procrastinate. The sooner you get your taxes done, the better.
7. Stay Up to Date on Tax Law Changes
The IRS releases new tax law changes irregularly, which can make you stay up to date on tax law changes. It may be difficult for those who are self-employed. It is essential to keep yourself updated by checking their website from time to time. Staying on top of tax law changes is essential to ensuring you’re always compliant.
Ensure you’re always up-to-date and compliant. When it comes to freelance taxes, you should know the deduction rules. There are many deductions available for freelance businesses, so make sure you know what you can and can’t deduct come tax time.
This way, you’ll know what deductions you can take and how to properly file your self employed tax rate.
Get Help if You Need It
Now that you’ve seen all these tips, you should feel more prepared to tackle your freelance taxes on your own. And following these tips can help you get your freelance taxes done in a flash.
Did you enjoy this article? If the answer is yes, then you’re in the right place. Our website was created with freelancers like you in mind, which is why we bring you content like this on a regular basis. Be sure to check out some of our other posts!