Ways You can Track and File Your Freelance Income
Due to the so many benefits freelance work has many people have turned to it. When freelancing you get to work at any time. Another benefit of freelancing is that you can rest at any time you feel. Another reason why freelancing is essential is that you get to choose your own client. You need to ensure that you always pay your tax as a freelancer. The definition of a freelancer by the IRS is any 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. A person who is self-employed is also termed as 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. Read this article for you to understand how you can track and file your income if you are a freelance.
The first thing you need to know is the taxes you need to pay. You should know the amount of tax you need to pay if you are a freelancer. In addition to any income tax you own you will also pay the tax. Some of the representations of the self-employment tax is the 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. For you to know how to track your income it is vital to ensure that you get a form from each client. 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. In certain months which are April, June, September, and January the freelance tax is paid. Knowing specifically when you are supposed to pay the tax so that you can avoid any problem with the IRS is vital.
As a freelance, you should also know 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.
To sum up, for you to know the ideal guidelines for tracking and filling freelance income it is important to look at the above article.