Freelance work is a great way for people to make extra money. Also, for some that have enough to do, outside of the traditional 9 to 5 hours, they may be able to earn an amount that will pay for all of their living expenses and more. Whatever the situation, RealtimeCampaign.com explains that you need to know that you may be required to pay taxes on the earnings that you make by the end of the year. Normally, the amount that has been set by the IRS is about $400 income. So, you need to know this information and other related stuff about someone like Dave Burton that determines how you need to file taxes as a freelancer.
1. Keep All of Your Receipts for Documentation
Running a business can be very time consuming and the activities that you do every day can be very difficult to manage without a plan. A plan is essential for a number of different reasons including learning how to keep all of the receipts that you need for tax time. Knowing what receipts you will need and which ones that may not apply usually takes time to understand if you have not had an opportunity to do this before. For instance, if you buy supplies for the business to keep up with your tax information, you should keep these receipts to support this business expense. For more info, click this link.
2. Document All Business Mileage for that Year
Another part of a freelancer tax filing that you need to be familiar with is recording business mileage. In some cases, you may only drive a few miles during the year to find the things that you need to do your business. Or, you may even drive to get your job done for the organization that you are running. Based on the amount that you drive, you also have an option to use a standard calculation figure or record each mile that you actually drive. To determine which option is best for you, this graph shows what it’s actually like to be a freelancer and how the mileage for your business needs to be filed.
3. Make a List of Tax Deductions
When you are working online as a freelancer or any type of freelance position, it is important that you know exactly what tax deductions are available to you and which ones that do not apply. Thankfully, with so much invaluable data online, you can find a list of items that IRS will take as valid based on the laws that govern what a freelancer can claim for that particular tax year. This list can help to guide you throughout the year in deciding which expenses you can deduct.