Being a freelancer often requires more tax planning than if you were getting an employee paycheck. For one, you have to use a 1099-Misc rather than a standard W-2. The following guide explains some of the other differences to maximize your savings and minimize your stress on the subject.

What Self-Employed Individuals Should Know About Doing Their Taxes

1. Save Receipts for Deductions

As a freelancer, you are entitled to take numerous deductions for ordinary and necessary items related to business operations. Saving your receipts for expenditures such as raw materials, office rent, insurance, and utilities enables you to claim and prove your money-saving deductions to boost your bottom line.

2. File Quarterly Returns

Generally, as a self-employed person, you must make estimated tax payments quarterly. IRS Publication 505 provides a wealth of information to guide you through the withholding tax and estimated tax requirements and help you meet filing deadlines. Setting aside money weekly or monthly to pay your Social Security and Medicare self-employment taxes helps you avoid having to come up with a big chunk of cash every April, June, September, and January.    

3. Get Help From an Accountant

Seeking assistance from a Certified Public Accountant (CPA) could be one of the best business decisions you make since they can help you organize your paperwork, find relevant deductions, and meet all government requirements. In addition, your CPA is a representative approved to appear before the IRS on any matter if needed.   

Tax planning becomes less complicated for freelancers who have an accountant’s help. Throughout the Texarkana, TX, area, freelance business owners who value individualized service select Young Hoy & Burnett, CPA as their accountants. Backed by more than 40 years of experience, these financial and tax planning professionals focus on enhancing your bottom line and ensuring your compliance with city, state, and federal tax legislation. Visit them online to learn more about their capabilities. Call (903) 794-2211 to schedule a consultation.