While employers are responsible for taxing employee income, self-employed workers must calculate their own taxes. Whether you’re an independent contractor without much experience filing your own taxes or you’d simply like to devote more of your time to working with your clients, seeking professional tax help could make your life much easier. Here are some key considerations for freelancers when it comes to taxes. 

What You Should Know About Taxes as an Independent Contractor

1. Your Business Structure Affects Your Taxes

The structure of your business — whether you have a sole proprietorship, partnership, or corporation — will have an impact on how your business is taxed. If you’re a sole proprietorship, you and your business will be considered the same legal entity by the IRS. Conversely, corporations are subject to corporate tax because they’re considered a separate legal entity. 

2. You Need to Pay Taxes More Often

Independent contractors are subject to quarterly tax payments, which must be made four times per year. This entails estimating some tax payments, which can be done with Form 1040-ES. Waiting until April may result in penalties and added fees. 

3. You May Be Eligible for Deductions

If you work out of a home office, you may be able to deduct costs related to your property and mortgage. You may also be eligible for other deductions related to business supplies and equipment. When deducting eligible costs, keep your receipts in case the IRS has questions later. 

4. Your Clients Must Issue 1099-MISC Forms

Form 1099-MISC lists the amount paid to you by clients. Each client needs to send you a separate form, so if you have many clients, you’ll receive a lot of 1099-MISC forms. These forms are crucial to filing your taxes, so be sure to follow up if you don’t receive one from a client. 

When you receive tax help from a skilled accountant, you gain indispensable peace of mind. Linda M. Shiraiwa CPA, PS provides tax help to individuals, business owners, and independent contractors. She can help you with quarterly filings as well as determine what deductions apply to your tax situation. She also offers other essential business accounting services, including help with payroll and bookkeeping. Get help with your taxes in Gig Harbor, WA by calling (253) 858-6030. Learn more about her services by visiting the website.