The workforce has changed dramatically with more people working as freelancers or for themselves than ever before. This comes with quite a bit of freedom but many of these professionals have a hard time filing their taxes. The write offs for a home business can be pretty extensive but claiming too many can lead you to an audit from the IRS. The following are tips for filing taxes as a freelancer.
PayPal and many other forms of electronic payment provide tax forms for those making over a certain amount with a large number of transactions. In the past the freelancer would have to file every tax form they were sent but now if the company paid via PayPal only one form has to be inputted. Paying people through online payment is also a great way to track finances as well as see payouts when tax season rolls around.
Keeping any bills that directly impacted work like upgrading to business speed internet or buying something for work should also have receipts. These will come in handy if you do get audited as this can happen from a simple mistake rather than a blatant one. There are apps that can be used to track business expenses and even can file the receipts in the correct area after a picture is taken.
Going to an accountant can cost a few hundred dollars that you could have spent at True Religion. With Turbo Tax being so easy to use this can be kind of a waste of money. This can be avoided by keeping things organized as far as tax papers go for your business. In cases that you run a company from home with multiple employees then you should have taxes done by a professional. There are exemptions for business owners that provide work for a certain number of people each year.
Tax season should not scare anyone who works as a freelancer if they have kept everything they have organized. Start saving for tax season today or have a separate account to pay off taxes if you have not paid them quarterly.