How to Track and File Your Freelance Income
Due to the so many benefits freelance work has many people have turned to it. When freelancing you get to work at any time. Another benefit of freelancing is that you can rest at any time you feel. Another reason why freelancing is essential is that you get to choose your own client. However, as a freelance it is vital to ensure that you always pay your taxes. The IRS define a freelancer as a business owner. 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. Here are guidelines for tracking and filing your freelance income.
First off, it is vital that you know is the taxes you need to pay. You should know the amount of tax you need to pay if you are a freelancer. The tax will be paid in addition to any income tax you own. Social security and medical taxes that the other employees who work on a full-time basis are deducted from their paychecks are some of the representations of self-employment tax.
The other thing you 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. By doing this you will get 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. You can pay the freelance tax quarterly in the month of April, June, September, and January. Knowing specifically when you are supposed to pay the tax so that you can avoid any problem with the IRS is vital.
As a freelance, you should also know the deductions you can claim. It is possible to 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.