Money Saving Tips That Will Help You When Filing Freelance Taxes
A large part of the workforce will be freelancers in the future according to studies. With freelancing, you have the freedom of working from where and when you want. As a freelancer, you will make more money than having a regular job with a fixed schedule. Taxes is what may be standing between you and your freelancing lifestyle. You will not find taxes as complex as they seem when you have some knowledge. Below are some of the money-saving tips that will help you when filing freelance taxes given by check stub maker.
One of the tips that will help you save money is keeping track of all sources of income. Throughout the year, you may have various clients that you may be working with as a freelancer. It is therefore important for you to keep track of all sources of income when it comes to taxes and freelancing. It will be possible for you to track all your clients and income if you make a spreadsheet. The projects due date, invoice sent, expected pay and payment received should be on the columns and each client should have a designated new page on the spreadsheet.
Knowing where the payment process of the projects you have done for various customers are will be possible with this format. You should also make quarterly payments if you want to save money. Being a newbie freelancer, you may not know how to pay taxes. Unlike with traditional employment where the tax will be deducted from your paycheck by your employer, paying taxes as a freelancer is more involving. As a freelancer, you will be paid in full for the jobs you will do for your customers without taxes being accounted for.
It is a great idea to make quarterly payments because of this. Setting aside taxes, as you get paid, is another money-saving tip to help you when filing freelance taxes. It is easy to take taxes for granted if you have a traditional job. Failure to plan taxes properly may make freelancers find it tough at certain times. Such circumstances can be avoided by starting a separate bank account for tax purposes only. When you are a paid for a project, you can transfer some amount of the money to the separate bank account for taxes so that you will not be tempted to use the money.
If you want to save money you should not forget about deductions. If you are a freelancer, you will be taxed on your net income minus business deductions. For this reason, you will be taxed less on your income if you have more deductions. You should track your expenses and save receipts throughout the year if you want to know your actual costs. The following are some expenses that you may have; office equipment like computer, healthcare expenses and mileage for work-related travel.