How to Track and File Your Freelance Income
Numerous number of people have turned to freelance work because of the many benefits it has. You get to work at any time you want when you freelance. Another benefit of freelancing is that you can rest at any time you feel. Another benefit of freelancing 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. 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. Here are guidelines for tracking and filing your freelance income.
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. The tax will be paid in addition to any income tax you own. Social security and medical taxes that the other employees who work on a full-time basis are deducted from their paychecks are some of the representations of self-employment tax.
The other thing you need to know is 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. This form should contain the money you have been able to receive from the work you have done for the clients. Doing 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. Hence, you will be at the right side of the law.
As a freelancer you should also ensure that you understand how often you should pay your freelance tax. You can pay the freelance tax quarterly in the month of April, June, September, and January. You need to make sure that you know specifically when you are supposed to pay the tax so that you can avoid any problem with the IRS.
The other thingPayStubCreator you need to know as a freelancer is the deductions you canPayStubCreator claim. You should deduct business expenses like office rent, professional fees, training and education, licensing and certification fees, along with supplies and travel costs.
Finally, looking at the above article will help you to know how to track and fill your freelance income.