Help You Do Your Taxes As A Freelance Coder
Freelance coding is seen as a rewarding career by most people who do it, especially because they are able to set their own working hours. However, there is a downside of freelance work that is doing taxes. The process of doing taxes for employees working in a firm is straightforward. Filing an internal revenue service (IRS) tax form noting all deduction s is the only thing you will need to do. At times, IRS may give you money back. Being a freelancer, you will have to do your taxes differently.
This article aims to help you discover more about doing taxes as a freelancer. You should hire an accountant; this is one of the tips. An accountant is experienced in money matters, and they will help you navigate the tax filing procedures. It is crucial for you to do your taxes right as a freelancer. Employers subtract the taxes from employee’s paycheck and give them a pay stub to show the amount of money taken out. Being a freelancer, you will have to do these by yourself, and failure to pay the right amount may get you into trouble.
You should know what you have to pay. Since the taxes are automatically deducted from their paychecks, full-time workers do not need to know what they should pay. Freelancers are considered as both businesses and workers. As a result, they are required to pay self-employment tax and income tax. This sums up to a lot of money. Therefore, freelancers have to come up with several expenses such as office utilities, purchases made for the venture like a computer and rent to reduce the payable tax.
You should keep track of your payments and expenses; this is another guideline. You need to keep track of the payments made, like getting pay stubs from your clients and keeping receipts of all the purchases related to your business that you have made. Asking for a receipt if you get cash payments will be vital. All these documents should be filed and organized to enable you to find them easily when you want them. They will come in handy when you are called upon to prove your expenses and income.
It is crucial to know about the freelancing tax form provided by the internal revenue service. Formal employees are required to fill a form that they use to file tax. This form differs from the one that freelancers use. The forms freelancers use to show the amount of money they have paid throughout the year, pre-taxes. Filing taxes will hence be possible with this form. Most people find it hard to do freelance taxes although they enjoy being self-employed. To know how to file your taxes well, view here.
Cited reference: Resources