Ways You can Track and File Your Freelance Income
Many people have turned to freelance work because of the many benefits it has. Some of the benefits of freelance work is that you get to work at the time you want. When freelancing you can also rest at any time you feel. You get to choose your own client when you freelance. As a freelancer it is vital to ensure that you always pay your taxes. The IRS define a freelancer as a business owner. If you carry on a trade or business as a sole proprietor or an independent contractor you are termed as a self-employed person. 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. Read this article for you to understand how you can track and file your income if you are a freelance.
Chief among the things you need to know is the taxes you need to pay. It is important that as a freelancer you know the amount of tax you need to pay. In addition to any income tax you own you will also pay the tax. The self-employment tax represents social security and medical taxes that the other employees who work on a full-time basis are deducted from their paychecks.
You also need to know how to track your income. It is vital to ensure that you get a form from each client for you to know how to track your income. The money you have been able to receive from the work you have done for the clients are some of the things that will be contained in this form. This will help you to know exactly the amount of money you have earned and how much money you need to pay as tax to the IRS. You will, therefore, get to know the right side of the law.
It is also vital that you know how often you should pay your freelance tax. The freelance tax is paid quarterly in certain months which are 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.
Another thing you need to know is the deductions you can claim. You should deduct business expenses like office rent, professional fees, training and education, licensing and certification fees, along with supplies and travel costs.