If you’re self-employed, one task that’s likely at the top of your to-do list is taking care of your taxes. Whether it’s being aware of tax deadlines or making sure you have all the right paperwork on file, avoiding an audit can be tough.
Here are five ways to make sure you get the most bangs for your buck when filing your freelance taxes this year (and avoid any unwanted attention from Uncle Sam).
1. Maximize Your Deductions
When it comes to saving money on taxes as a freelancer, deductions are a key. You’d be surprised how many expenses can potentially qualify as write-offs for small business owners. According to TurboTax, some common write-off categories include:
- Home office
- Vehicle expenses
- Travel expenses
And the list goes on. Again, this is where it can be helpful to work with a professional who specializes in taxes for freelancers. These pros are familiar with the many deductions that freelance businesses qualify for and can help you maximize your deductions when filing your taxes says Aron Govil.
2. Keep Tabs on Deadlines
Tax deadlines vary depending on your income level and how you get paid (e.g., hourly, monthly, annually). However, there’s one date you’ll want to keep in mind above all else: April 15th. That’s the date by which you’re expected to file your tax returns each year — and if you owe the IRS money and fail to do so, you could face a penalty.
3. Take Advantage of Tax Breaks for Small Business Owners
Even if you don’t own the business, filing taxes as a freelancer can still be advantageous. If your income comes from self-employment (e.g., consulting or contracting), you might qualify for special tax breaks that salaried employees typically don’t get to enjoy — such as the home office deduction previously mentioned.
4. Get Your Paperwork in Order
This may seem like a no-brainer, but it’s critical that you keep every bit of paperwork over the course of your freelance career in order. It doesn’t matter whether it pertains to client invoices, receipts or mileage logs; having accurate records is the only way to ensure you’re getting the biggest tax refund possible.
5. Take Advantage of Free Help
Finally, if you want help navigating the income tax process as a freelancer or small business owner, don’t be afraid to ask for assistance. Here at Intuit, we offer free advice and resources — such as seminars and workshops — to anyone who needs assistance filing their taxes. Call us today at 1-800-446-8848 or visit your local office in order to get started.
What is a Deduction?
A deduction is an amount you can subtract from your income. Deductions lower the amount of your taxable income, helping to decrease the amount of tax you owe for a year.
Deductible expenses may include:
- Charitable donations made throughout the year
- Business expenses such as insurance and gas used for business purposes
- The cost of tax preparation software and professional services to file taxes on your behalf etc…
Who Can I Deduct My Expenses From?
If you’re self-employed or run a small business, you can deduct any personal expenses from your income. But if this isn’t the case, some expenses might still qualify as deductions — such as certain medical costs or student loan interest.
What Is a Tax Return?
A tax return is a document you use to report and pay your taxes for income earned throughout the course of a year. If you file as an individual, this typically includes your salary, investment gains and other sources of taxable income. Self-employed individuals are also required to file quarterly estimated taxes during certain months in order to avoid penalties for underpayment or late payment of taxes due.
How Do I File Taxes As A Freelancer?
The process of filing taxes as a freelancer differs slightly depending on where you live. First, if you’re located in Texas, New York City or Philadelphia, that means you likely have to submit estimated payments each quarter. This is because these states require self-employed individuals to pay taxes on a quarterly basis. Otherwise, you can file your income taxes using any one of our forms.
Intuit has been a pioneer in cloud services since it launched its QuickBooks online service in 2010. Since then, Intuit has offered several products that have allowed small businesses owners to manage their company from any place on Earth with an internet connection. According to statistics from the company, there are more than 10 million entrepreneurs worldwide who depend on QBO every day.
Conclusion by Aron Govil:
Thanks to Intuit and its great products, filing taxes as a freelancer just got easier. With almost one billion and five hundred million users around the world, QuickBooks Online is the best solution for small businesses owners who earn money from home or around the planet. Thanks to QBO you can access your report 24/7 so you can always plan ahead with all the information in mind.