Simplifying Tax Season: Tax Preparation for Freelancers

Many people prefer working as freelancers or self-employed. Companies also prefer hiring freelancers because they don't have to handle payroll and pension plans for them. Working as a freelancer, you must file your income taxes on time when tax season comes. In this blog, we'll discuss how freelance taxes work, tax preparation for freelancers – how to file taxes and the importance of outsourcing income tax services for freelance workers.

How Freelance Taxes Work: Understanding Tax Preparation for Freelancers

Operating a freelance business is similar to owning your own company. When you work, your employer usually sends you a payroll slip that shows you how much money you've made and how much has already been withheld for taxes.

But when you're a freelancer, it's up to you to figure out what you made and what you must include on your return. Keep in mind that any income will have to be reported on your tax return. Yes, even cash that you receive! (although, who gets cash nowadays)

How to File Income Taxes as a Freelancer: Tax Preparation Guide for Freelancers

Most taxes you'll pay as a freelancer are self-employment and federal plus state income taxes.

For tax purposes, freelancers typically file as sole proprietors. This is still the case whether they create an LLC or own all of their company's assets.

• You and your business are considered the same for tax purposes. Report the income you earn or business losses on your personal tax return (IRS Form 1040).

• If you profit, the money is added onto any/every other income. If you're married and filing jointly, this may include interest income from a savings account or your spouse's income. The entire amount earned is then subject to tax.

• You must include IRS Schedule C, Profit or Loss from Business, with your tax return to demonstrate whether you have a profit or loss from your sole proprietorship. You will include your business income and deductible expenses there.

Hiring A Professional Accountant for Tax Services for Freelance Workers

Agro Accounting CPA provides accounting and income tax services for freelance workers. Our tax preparation guide for freelancers can help you save big on taxes, ensuring you make the most of your freelance income. Connect with our CPAs through our website today!