When you work for a company in the corporate world, your taxes are usually deducted for you and it’s less of a hassle for you to figure out how to file your taxes.
However, for freelancers, it’s on you, baby. While it is undoubtedly stressful, when you know what to do to maximize deductions and savings, it can become a bit easier. Here are a few tips to help you out:
Use helpful software
Something that can make a big difference for you as you start working on your taxes as a freelancer is software. With all of the beneficial tax business software that is available today, it makes sense to find an option that has all of the features that you want.
With technology, doing your taxes can be simplified, even if you’re a freelancer. Most of the time, this type of software makes filing taxes straightforward, even for the most confused tax-paying individuals. Keep in mind that these sites do charge money for you to file your taxes, but they’ll make the process easier than if you were to try to do it offline.
Seek professional help
If you don’t feel confident doing your taxes, it may be a good idea to look for a professional accountant to help you out. Someone with experience in taxes can help you maximize the kinds of deductions that you should be getting as a freelancer so that you can save more money for yourself.
They help to take the guesswork out of the process and can help you look out for things that could get you into trouble if you’re not careful. Yes, you’ll have to spend money to file your taxes with a professional, but this can help you to save more money than you may be able to otherwise.
Don’t forget to estimate tax payments
As someone “running their own business,” you’ll need to make sure you’re setting aside estimated tax payments.
You want to avoid penalties and also stay organized when it comes to tax payments, so instead of waiting to pay taxes owed at the end of the fiscal year, take time to estimate your quarterly taxes so that you pay as little as possible. You may not get the amount perfectly right but you can at least get it close enough.
Figure out how to maximize expense deductions
The thing about doing your taxes as a self-employed individual is that you can report some things as expenses in ways that you didn’t even realize. While you’ll want to make sure you’re being honest and have receipts, etc. to prove what you’re reporting, in case of an audit, you can claim some items or things as expenses that you would have never thought of.
From your gas spent for a side hustle to lunches bought while traveling for work, there are a lot of ways for you, a freelancer, to save money while filing taxes.
Think about a retirement plan
By the way, as a freelancer, you may want to start thinking about how you can start setting yourself up for retirement. While many people working for large corporations can set aside for their futures with their companies, as a freelancer, it may be up to you.
But the benefit here is that as you start making payments towards a retirement fund, you could get some savings on your taxes, so take time working with an advisor to figure out how you can save for your future while spending less on your tax payments. It’s worth considering!
In Conclusion
If you want to be confident that you’re filing taxes correctly and also saving your money and getting deductions wherever possible, take time to learn the tricks for filing taxes as a freelancer. Whether you work with a professional or you use software to help you get it right, there are tricks to getting it right as a self-employed individual.
