Almost a third of the workforce in America is working in the Freelance sector. In 2019, America recorded 57million people working as freelance. The truth is that although some people do freelance because they have lost their job, others do it as their main source of income. For those that freelancing by choice they will brag of enjoying the flexibility of the job freedom to make more than any other employment. Besides, freelancing also has some hard parts that come along with it for those that do 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. You should make sure you have filed your taxes on time to avoid penalties or losing your business which means losing your income too. This page will provide you with five important steps that you need to know when you are filling freelance tax.
It’s good to hire a tax professional. Tax filing will defer from one individual to the other depending on the line of work and this can make things complicated. It’s advisable that you hire tax filing services in case you find it complicated for you to do and you can be assured of an excellent job. Click here for more info.
You need to decide on your business structure. Freelance business can be categorized in any of the business structures like Sole proprietor, LLCs, or S – corps among many others that you can view here. This is a very important step because it can make all the difference in your tax filing. 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. Since your total tax bill should range from 30 to 35% of your income you should divide that into four parts and you see how much you should pay.
Don’t forget to track your income. Keeping records of your income since you are self-employed will make it easy for you when you are filing the tax. The check stubs online for payroll management can help you to manage your records online for easy income tracking.
Don’t put it off. The worst thing you can do is to procrastinate your tax filing. You can get more of such info if you click for more.