Freelancers manage their own taxes in most cases, and some don’t understand exactly what they are doing. Learning about tax deductions helps freelancers save money on tax responsibilities and keep more of their earnings with them each year. Financial articles help freelancers discover new ways to save and avoid higher costs at the end of the year.
Plan Tax Payments Every Quarter
Planning tax payments every quarter helps freelancers pay their tax implications at the end of the quarter. It’s invaluable for freelancers to submit quarterly tax payments instead of waiting until the end of the year. Too often, the end of year payments become overwhelming for freelancers and lead to tax liens. An accountant could help the freelancer calculate their tax liability according to their earnings at the end of the quarter. Reviewing Tax Tips for Freelancers helps freelancers learn new ways to manage their tax responsibilities without negative consequences.
Keep Receipts for All Expenses
Keeping receipts for all expenses helps freelancers track costs for their business and deduct the costs according to tax laws. Freelancers gain tax deductions according to what type of work they do and how they use their earnings for their business. For example, freelancers can use fuel expenses as a tax deduction if they travel to client’s homes or use their automobiles to travel to facilities for research. Reviewing business-related expenses helps the individual save on their tax implications and avoid high payments each quarter or at the end of the year. For more information, freelancers can read more articles by David Burton on his blog here.
Do You Work From Home?
When working from home, the freelancers can deduct certain expenses for their home business on their taxes. Deducting the space used for the business helps the freelancer save on tax liabilities. According to RealtimeCampaign.com, the freelancers can deduct a portion of their utility bills on their taxes, such as their electric and water bills. If the freelancer uses internet services for their business, a portion of the costs is tax-deductible, too. Any supplies the freelancer’s purchase for work purposes are deductions, too.
What Business Services Do You Use for Work?
Reviewing business services the freelancers use for work helps them find more savings. For example, if they outsource their company network services or use a call center for incoming calls, the freelancer deducts the expenses on their income tax returns. As long as the business service is used as part of the freelancer’s job, it is deductible.
Track All Your Earnings
Dave Burton recommends tracking all earnings helps the freelancer determine what expenses are unnecessary. It’s a great way to trim the fat and save more for more business investments. Cataloging all expenses helps the freelancer create a budget, too.
Freelancers discover extraordinary ways to save money on tax implications. Following the advice of financial professionals helps the freelancer get a better understanding of what they can deduct. Reviewing available tax deductions could maximize the freelancer’s refund and help them keep more money in their business.