Are you an independent contractor who is always feeling a little anxious or stressed out during tax season? Maybe you have never had to file your taxes independently as a freelancer, and are unsure of how the process works? Perhaps numbers and math are just not your things, and you are looking for a way to quickly and easily take care of your taxes so you can stop worrying about it? If this sounds like you, then you will want to continue reading to get some valuable information. This article will seek to outline a few simple tips which can help freelancers handle their taxes correctly. If you know how to properly deal with your taxes as a freelancer, then there are quite a few options available to help you get back as much money as possible on your tax return.
Plan
If you are just getting started in the freelancing game, then there is a good chance you probably have never had to plan out your taxes before. If you are not prepared with a proper plan in place, then you will likely encounter many different issues while trying to submit your taxes. By carefully outlining the different steps involved in the whole process, then you can plan for any issues which might pop up, and have a solution ready to go just in case.
Keep Receipts
As a freelance contractor, there is a very high chance that you will have to make necessary purchases for your business, to be able to provide the services or product which makes you money. Some people may not be aware that these different expenses can all be written off as a business expense, and claimed on your yearly tax return. Things like gas for your work truck, tools, and PPE can all be paid for by your business, to avoid paying out of pocket for these necessities.
Use Technology
In the modern digital age, almost every single industry has gained new technologies that will help to make your job much easier. If you are a private contractor or freelance worker, then you will almost certainly need to incorporate some new modern tech into your work. Many freelancers have trouble filing their taxes due to a lack of knowledge on how to do it properly. Experts at 1099 tracker discuss the different ways that using modern technology can help to make filing your taxes as a freelancer much easier and more efficient. By using apps that can help to organize and file your taxes, you will never need to spend another cent on hiring a professional accountant.
Always Invoice
To properly submit your taxes as a freelance contractor, you need to have all your invoices to keep track of sales and income. If you are not constantly invoicing people who have used your product or service, then you will not have accurate numbers that are required to make a proper tax filing. If you are unsure of how exactly invoicing works, then be sure to use or at least consult one of the many invoice templates available online. BY using systems of invoicing that are proven to work, then you will be able to count on having all the necessary paperwork when tax time comes.
Write-Offs
If you have never filed income taxes as a freelance contractor, then you may not be aware of all the different things that you can write off as a business expense. For example, if you work from home, then you can claim a small portion of your housing and electricity expenses on your income tax as a business expense. There are also other options, such as having a business meeting with a client over dinner, which you are allowed to write off as another business expense.
Hopefully, this article has been helpful and informative regarding the different things that you can do as a freelancer in or to handle your taxes correctly. Even if you have never done your taxes independently before, you should have no trouble finishing them correctly so long as you use these simple tips and tricks. Why not make your money and taxes work for you instead of against you? If you submit everything in the correct fashion and under the proper timelines, then you will be able to rest easy knowing that you are doing everything by the book, and will not need to worry about any mistakes messing up your taxes. Hiring professionals is not always necessary, but can certainly be helpful if you are trying to ensure that everything is done correctly.
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