How to Track and File Your Freelance Income
Many people have turned to freelance work because of the many benefits it has. When freelancing you get to work at any time. When freelancing you can also rest at any time you feel. You get to choose your own client when you freelance. However, as a freelance it is vital to ensure that you always pay your taxes. A freelancer is defined as a person who owns a business by the IRS. Anyone who carries on a trade or business as a sole proprietor or an independent contractor is known as a self-employed. 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. The following are ways you can track and fill your freelance income.
First off, it is vital that you 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. 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.
Another thing you also 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. 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.
Another thing you need to know is 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.
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.