Freelancing has attracted more and more people to the workforce in America. In 2019, America recorded 57million people working as freelance. We cannot deny the fact that there are some people that are freelancing because they have been laid off but there are still people that love freelancing. The good thing with freelancing is that you have a flexible schedule and that your income isn’t fixed. 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. The fact is that tax filling for freelancers is very easy and not a tedious process as many people think. When you file your business returns you are saving your business and your income too. This page will provide you with five important steps that you need to know when you are filling freelance tax.
Hiring a tax expert is one of the things that you should consider for your tax filing. The different lines of work in freelance can make tax filing a big problem and for that not everybody that can do it. Make sure you request help from tax experts when you get stranded on how to file your freelance tax. Make sure to view here for more details about freelance filing.
The next thing that you should do is to decide what type of business structure you have. 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. On this website, we have provided more details about business structure and taxes in America.
Thirdly, you should learn how to estimate quarterly taxes. Quarterly tax estimation is important here because when you have a huge tax bill you can pay it in bits to reduce the burden. 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.
The next thing you are expected to do is to track your income. Make sure all your income and expenses are recorded and well filed because they are very crucial when it comes to freelance filing. Sometimes tracking your income can be daunting but if you consider checking stubs online for payroll management you will make it easy for you.
Make sure you don’t put it off. The worst thing you can do is to procrastinate your tax filing. If you want to know more about this service ensure to read more now.