5 Essential Things You Should Know About Filing Freelance Tax Form
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. Nevertheless, with so many positive things about freelancing you should learn that there are challenges that are involved with it. One of the things that challenge freelancers is tax filling. The good news is that filling your freelance tax isn’t a complicated thing to do but an easy one. Filling your self-employment taxes is very important because it’s one of the ways to protect your business and your income. Continue reading this site and you will learn more about the ways you can make your freelance tax filling easy.
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. For that reason if you are new in the business or you don’t know where to start make sure to contact this company for professional tax filing. Click here for more info.
You need to decide on your business structure. There are several business structures where you can categorize your freelance business which includes sole proprietorship, LLCs and S- corps, and many more that you will see if you click here for more. When you classify your business as a sole proprietor you will pay tax differently from someone who classifies the business as LLC which will cost more taxes than the others. if you want to read more about business structure and tax effects see this homepage.
Understanding the quarter tax estimate. 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. You should divide the 30 to 35% which is the yearly tax of your total income in into four and find out what is your quarterly estimates.
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. To make your record-keeping easy make sure to use check stubs online for payroll management.
Make sure you don’t put it off. The worst thing you can do is to procrastinate your tax filing. There are more of our pages that have informative information so make sure to check here!