As the saying goes, nothing is certain except for death and taxes. This rings true, especially when you’re a freelancer.
Even when you thought you have taken a break from taxes as a freelance writer, theIRS come running to your housetoterrorize your income. This only gets more difficult asyou won’thave a dedicated HR personnel who will file your deductions. You’ll have to fill out the paperwork and file themyourself.
During these times of duress, you may be hittingyourself in the head for not being prepared for this complicated paperwork that, after you’re done with it, takes awaypartofyour annual salary.
If you have yet to undergo this excruciating process as a freelance writer, avoid the hassleby checking out the infographic belowfromQuickBooks about tax deductions.
Always set aside money to pay your taxes
A problem that freelancers may have is managing their money.
Unlike full-time employment in which taxes are automatically deducted from your salary, freelancersreceive their money in full and will have to file their taxes by themselves.However, there may be times when freelancers spend most of their salary and don’t leave money to pay for their taxes either monthly or quarterly.
As a result, they won’t be able to pay their taxes on time and will incur needless penalties.
If you have a history of making poor decisions as a freelancer when it comes to money, then you must kick your bad habits to the curb by following the tips featured in the post at LifeHack.
Find out taxdeductions
There are expenses listed in the infographic above that you can recoup fromyour tax statement. Make sure that you keep track of theseexpenses so you can account them properly into your statement. You may want to convert them into their digital formats using tools like ave, GoDaddy Bookkeeping, and others featured in this post at Betterment so you can organizeyour expenses more efficiently.
There are other deductible expenses not mentioned above as featuredin this post at Freelancers Union.
Hire a professional
If filing for your taxes takes too much of your time and effort (especially if you’re running a business), you can ask help from an accountant who will help you settle your monthly or quarterly statements. Here’s a Lifehacker post that features post on how to find the right tax professional for you.
Below are additional resources to help you pay your taxes properly:
- THE FREELANCER’S GUIDE TO THE COMPLICATED MESS OF TAX DEDUCTIONS at Fast Company
- Freelancers, Here’s How To Do Your Taxes at Forbes/Investing
- The ultimate tax guide for freelancers at Freelancers Union
Final thoughts:You cannot avoid taxes without incurring stiff penalties after an IRS audit. Therefore, it’s best that you follow the guidelines in this post on how to pay your taxes the right and live an honest freelance life!
More on filing your taxes: