Ways You can Track and File Your Freelance Income
Numerous number of people have turned to freelance work because of the many benefits it has. You get to work at any time you want when you freelance. Another benefit of freelancing is that you can rest at any time you feel. Another benefit of freelancing is that you get to choose your own client. However, as a freelance it is vital to ensure that you always pay your taxes. A freelancer is defined as a person who owns a business by the IRS. A self-employed person is anyone who carries on a trade or business as a sole proprietor or an independent contractor. If you are a member of a partnership that carries on a trade or business or if you are otherwise in business for yourself such as part-time business you are known as self-employed. Read this article for you to understand how you can track and file your income if you are a freelance.
Chief among the things you need to know is the taxes you need to pay. You should know the amount of tax you need to pay if you are a freelancer. In addition to any income tax you own you will also pay the tax. Some of the representations of the self-employment tax is the social security and medical taxes that the other employees who work on a full-time basis are deducted from their paychecks.
Another thing you also need to know is how to track your income. For you to know how to track your income it is vital to ensure that you get a form from each client. The things that should be contained in this form is the money you have been able to receive from the work you have done for the clients. Doing this will help you to know exactly the amount of money you have earned and how much money you need to pay as tax to the IRS. Hence, you will be at the right side of the law.
It is also vital that you know how often you should pay your freelance tax. The freelance tax is paid quarterly in certain months which are April, June, September, and January. You need to make sure that you know specifically when you are supposed to pay the tax so that you can avoid any problem with the IRS.
Another thing you need to know is the deductions you can claim. You should deduct business expenses like office rent, professional fees, training and education, licensing and certification fees, along with supplies and travel costs.
To conclude, it is vital to ensure that you look at the above article for you to know the ideal guidelines for tracking and filling freelance income.