10 Essential Tax Tips for Self-Employed Professionals
If you're a freelancer, small business owner, or independent contractor, you might feel confused when it comes to managing your finances and filing your taxes. Here's how to glean tax advantages with LLC status, digitize your paperwork for easy document management, and file your taxes with ease.
Tax Advantages for Freelancers
You can take advantage of some helpful tax perks through deductions.
You may be nervous about your tax burden, but keep in mind that you also qualify for the self-employment tax deduction to ease that expense.
You can deduct lots of healthcare expenses from your gross income.
You'll also be able to qualify for other helpful deductions, like your home office and business vehicle.
To gain additional tax breaks, consider forming your company as an LLC.
Organize Your Finances
These tips will help you implement a clear organizational system for your financial information.
Dealing with physical documents can get messy. Instead, follow these steps to digitize your paperwork and label your files on your computer. You can even use this tool to scan a document with your phone or tablet and turn it into a PDF, saving you the time it would take to manually scan and upload single pages using a copy/scan machine.
Choose affordable accounting software so that you can conveniently process all of your financial information and generate essential tax reports.
To stay on the safe side, you'll want to deposit about 30% of each paycheck into a savings account specifically dedicated to paying your taxes.
Filing Your Taxes
Follow these guidelines so that you're not caught off guard during tax season.
You don't have to file by yourself. Look for a local accountant who specializes in working with freelancers and small business owners. Attending an event with the Leavenworth-Lansing Area Chamber of Commerce is a great way to connect with a local accountant.
Prior to filing your taxes, gather up these essential documents to hand over to your accountant.
You're responsible for paying quarterly taxes. Make sure to check the quarterly filing deadlines!
You don't need to be a math whiz to manage your taxes as a freelancer. Once you learn the basics of self-employment deductions, file organization, and filing, you'll feel confident when it comes to paying your taxes. With these tips, you'll be able to save on your taxes by forming an LLC, keeping your paperwork categorized digitally, and easily filing your taxes on time.
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