Almost a third of the workforce in America is working in the Freelance sector. When the research was carried out in 2019 it showed that about 57 million people are absorbed in freelancing. We cannot deny the fact that there are some people that are freelancing because they have been laid off but there are still people that love freelancing. For those that freelancing by choice they will brag of enjoying the flexibility of the job freedom to make more than any other employment. Nevertheless, with so many positive things about freelancing you should learn that there are challenges that are involved with it. Filling tax is one of the hectic things that many freelancers find it complicated. We can promise you here that filling tax for freelancers isn’t as challenging as it may look when you understand how to go about it. When you file your business returns you are saving your business and your income too. This page will provide you with five important steps that you need to know when you are filling freelance tax.
Hiring a tax expert is one of the things that you should consider for your tax filing. The different lines of work in freelance can make tax filing a big problem and for that not everybody that can do it. For that reason if you are new in the business or you don’t know where to start make sure to contact this company for professional tax filing. Click here for more info.
Know your business structure. When you are working as a freelancer you can group your business as Sole proprietor, LLCs, or even S- corps among many more than you can see here. When you classify your business as a sole proprietor you will pay tax differently from someone who classifies the business as LLC which will cost more taxes than the others. On this website, we have provided more details about business structure and taxes in America.
Thirdly, you should learn how to estimate quarterly taxes. The reason why you need quarterly estimates is to make sure you pay your huge tax a little bit instead of paying in a lump sum which may not be easy. You should divide the 30 to 35% which is the yearly tax of your total income in into four and find out what is your quarterly estimates.
The next thing you are expected to do is to track your income. Income tracking is very imperative for freelance because it makes the filing less complicated than when you don’t have the details. Sometimes tracking your income can be daunting but if you consider checking stubs online for payroll management you will make it easy for you.
Putting it off should not be an option. Avoid postponing your tax filing dates because this can easily lead to not doing it at all hence attractive unnecessary penalties. There are more of our pages that have informative information so make sure to check here!