In America almost a third of the workforce is working as freelance. 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. For those that freelancing by choice they will brag of enjoying the flexibility of the job freedom to make more than any other employment. Besides, freelancing also has some hard parts that come along with it for those that do it. One of the things that challenge freelancers is tax filling. We can promise you here that filling tax for freelancers isn’t as challenging as it may look when you understand how to go about it. 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. It’s advisable that you hire tax filing services in case you find it complicated for you to do and you can be assured of an excellent job. Click here for more info.
You need to decide on your business structure. Freelance business can be categorized in any of the business structures like Sole proprietor, LLCs, or S – corps among many others that you can view here. 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.
Understanding the quarter tax estimate. This is very important because it will help you to avoid paying huge tax bills at the end of the year. The government expects that you pay from 30 to 35% of your total income and from that, you can calculate how much you can pay the tax in four parts.
Make sure you keep track of your income. Income tracking is very imperative for freelance because it makes the filing less complicated than when you don’t have the details. The check stubs online for payroll management can help you to manage your records online for easy income tracking.
Don’t put it off. Avoid postponing your tax filing dates because this can easily lead to not doing it at all hence attractive unnecessary penalties. There are more of our pages that have informative information so make sure to check here!