Being your own boss as a freelancer definitely has its perks. Ditching the morning commute. Working from paradise (aka your couch). Never having to participate in pointless PowerPoint meetings and all. But, running your own mini business also means that, come tax time, you better have your ducks in a row! Nothing kills that sweet #freelancelife vibe faster than realizing you owe a gazillion dollars to the IRS.
I feel you, I’ve been there, freelancer. Navigating taxes sans corporate accountants is daunting. While TurboTax tries its best, it can’t plan everything perfectly for you. Avoid these common blunders while tax planning for freelance workers and stay Zen by:
Planning for Self-Employment Taxes
Who knew being self-employed meant double taxes?! Both the employer AND employee portion fall on you now. So, budget for that extra 15% payroll tax to Uncle Sam. Set aside a percentage of each paycheck to cover what your boss would normally pay.
Making Quarterly Tax Payments
Everyone loves a big annual refund. However, the IRS expects freelancers to pay as you earn. Set a reminder for estimated quarterly payments to avoid underpayment penalties.
Deducting Business Expenses
Here’s tax newbie mistake #1 - missing juicy write-offs for expenses like office supplies, internet, continuing, etc. Track every legitimate business expense. Scan those receipts. Take all the deductions you can to lower your taxable income!
So sure, taxes as a freelancer are complicated. But with diligent planning, tracking, and the right CPA like Agro Accounting CPA on your team, you can master it.
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