Freelancing provides a level of freedom, but it does make tax preparation more difficult and complex. Over the course of the year, you might receive payments from hundreds of clients and spend thousands of dollars on deductible expenses, which increases the chances your return will raise some red flags at the IRS. Fortunately, there are some steps to take that will decrease your chances of being singled out for an audit.

3 Tips for Avoiding an Audit

1. Claim All of Your Income

Failing to report all of our income is one of the quickest ways to trigger an audit, so double-check your records and track down any missing 1099s. Even if you didn’t receive a 1099 from the client, they almost certainly reported that payment to the IRS. To avoid audits, be sure to include every freelancing dollar you earned on your tax returns.

2. Pay Quarterly Taxes

Traditional employees almost never have to think about their taxes, but freelancers and business owners are required to submit payments on a quarterly basis. Not only can forgetting to pay your estimated taxes result in a huge tax bill at the end of the year, but it can also draw the attention of the IRS.

3. Be Conservative With Deductions

Only expenses that are normal and necessary for your industry are deductible, so consider each purchase before writing it off. For instance, professional photographers can write off camera equipment and film, but taking too many deductions might raise some questions at tax time. If you’re unsure whether a purchase is a qualifying deduction, speak to a tax preparation professional before sending in your returns.

With over 20 years of experience serving freelancers and business owners throughout the D.C. Metro Area, ZP Tax offers tax preparation services done fast and right. Their experienced agents take the time to answer your questions, minimize your tax bill, and lower your chances of being audited by the IRS. Visit their website for more on their tax preparation services, or call (301) 587-4829 to make your first appointment.