Tax Season Cometh: 3 Things You Must Do As A Freelancer Right Now
Oh the freelance life. Everyone thinks it is a walk in the park because you have a relatively flexible schedule and sometimes you have pants optional days. But what people who work for companies don’t know is that when you are freelance you are essentially your own business. You have to be accountable for every dollar you make. With tax season coming around, how organized you have been as a freelancer is about to either make your life quite easy or quite hard. Here are some things you should always be doing as a freelancer:
Keep track of every dollar you make
However you want to do it, just do it. You will get 1099s for any company you make more than $600 with but keep track of the other ones just in case.
Keep track of your expenses
The good thing about being a freelancer is that you can write off a lot of your expenses but in order to do that you have got to keep a record. A few things you can write off include (according to LearnVest):
- Business cards, online ads and other tools used to promote yourself and your business
- Business insurance
- Interest paid on your business credit card or business loans
- Lawyer fees and other professional services
- Rent or dues on a workspace
- Repairs for your computer, camera and other business-related equipment
- Routine office supplies like pens, paper, staples, etc.
- Travel costs like plane and train tickets
- Business meals with clients and other entertainment reasonable for your business
Consider bringing in a professional
When you are a freelancer, even if you are working steadily, your income is going to be complex. It may seem annoying but hiring a professional is the smartest thing you can do.
Certified Financial Planner Miranda Reiter told Skillcrush, “If you typically receive your income irregularly and in big chunks throughout the year such as artists and freelancers do, you should consider hiring a professional to ensure that you will pay enough taxes. Paying taxes quarterly can also be a good strategy for these professionals.”
Another big sign that you should bring a professional in is if you don’t understand third party dcouments. Bob Wheeler, CPA and CEO of rwwcpa.com, told Skillcrush, “The first sign that you need a professional tax consultant is when you look at third party documents and realize you don’t have a clue as to what they mean. Assuming that you can interpret the documents, the time to hire a consultant is when things start getting complicated. So if the person has a schedule C (freelancer) that wants to take expenses, office rent and automobile expenses, probably better to get guidance from a professional.”
It may be a little expensive, but in the long run it will be worth it.