Save Money and Pay Less Taxes

Most people envy a freelancer's life: it seems unrestricted, commute-free and business attire -free. Also, freelancers get plenty of time to do the things they love. We think there is nothing that bothers them, and that simply isn’t true. There is at least one thing that bothers them: taxes!

During the first year, taxes seem so effortless to the uninitiated freelancer. There is no pressure to make any payment as it’s all presumably done after year-end, in the next spring. It would behoove such freelancer to seek the assistance of a professional who offers tax preparation to entrepreneurs as soon as possible. Let us go through the ways in which a freelancer can save money on taxes.

• Work with a Tax Professional. Freelancers should always have an accountant by their side. Hire one that deals with freelancers and small business owners. Having an accountant that can perform tax preparation for entrepreneurs can seem expensive versus DIY software, but it is an investment that will save you money, time and headaches in the long run. Someone who is not good with numbers and doesn’t want to pay more in taxes than necessary should get the help of such a tax professional.

• Know what you need to Pay and how much. Know the type of taxes you are required to pay along with their amounts. A full-time salaried person would have taxes deducted automatically from their pay-check. On the other hand, if you own a home, are married and have children, and/or you have income-related expenses the way a freelancer does, then you will be able to maximize your deductions and reduce your tax bill greatly.

• Keep Track of your Receipts. Keep email and digital receipts, and make a spreadsheet for each of your expense categories. A freelancer can easily track and provide, when needed, deductions in this manner. If you don’t have time to look after these things, then hire a bookkeeper who will work with your accounting expert in tax preparation for entrepreneurs.

Follow these tips and save your hard-earned money from overpaying on taxes. It would be best to consult with someone who does tax preparation for entrepreneurs in order to make this happen flawlessly.