A Guide To Doing Your Taxes As A Freelance Coder
Freelance coding is seen as a rewarding career by most people who do it, especially because they are able to set their own working hours. Doing taxes is one of the disadvantages of freelance coding. When you are employed in an established company, the process of doing taxes is simple. What you will be required to do as a worker is filling an internal revenue service (IRS) tax form, taking note of all deductions made from your wage. At times, IRS may give you money back. Doing your taxes as a freelancer takes a different route.
You can read more about doing taxes as a freelancer here in this website. One of the first tips outlined here is hiring an accountant. Since accountants have a vast knowledge of money, they will help you to navigate the tax filing proceedings. As a freelancer, you need to do your taxes well. Employers subtract the taxes from employee’s paycheck and give them a pay stub to show the amount of money taken out. Failure to make the right payment may get you into trouble because as a freelancer; you will have to do these processes on your own.
It is critical for you to know what you are supposed to pay. Full-time employees do not need to know how much they should pay since the taxes are automatically deducted from their paychecks. Freelancers are considered as both businesses and workers. Because of this, freelancers have to pay self-employment tax and income tax. This is why freelancers end up paying a significant amount of money as taxes. Therefore, freelancers have to come up with several expenses such as office utilities, purchases made for the venture like a computer and rent to reduce the payable tax.
Another tip is keeping track of your payments and expenses. It will be crucial to keep track of all payments like getting pay stubs from your customers and keeping receipts of all the business-related purchase done. If you receive cash payments, you should ask for a receipt. To ensure you will easily retrieve the documents when needed, you should file them well and organize them. When you are called upon to prove your expenses and income, these documents will be useful.
It is crucial to know about the freelancing tax form provided by the internal revenue service. There is a form used by formal workers to file their taxes. This form and the one that freelancers use have differences. The amount of money they have paid throughout the year, pre-taxes is shown by these forms. Filing taxes will hence be possible with this form. Most people find it hard to do freelance taxes although they enjoy being self-employed. You need to go through this page to be learn how to file taxes properly.
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