Meeting Your Tax Preparer for the First Time? Here's All You Need to Know

 

Choosing the best tax preparer is a challenging task. But once you have completed this process, you will be headed in the right direction. Now, you must plan to meet a tax preparation guide forfreelancers or the self-employed. Usually, people are a bit nervous about their first meeting, and thousands of questions pass through their minds. If you are going through the same phase, then keep reading to learn tips for planning the first meeting with your tax preparer.

 

●      Develop a healthy relationship

If you are a starting freelancer or entrepreneur, try to build a healthy relationship with your CPA. When you work with a person for a longer period, things become smoother and professional relationships may benefit your business. In addition, the experience of your tax preparer will help you to face the various challenges of your business.

 

●      Be honest

When you work with a tax preparation guide for entrepreneurs, you have to be honest. Trust should be the basis of your professional relationship. Share all your records and concerns with the CPA and, if there is any issue, try to find a solution together. Remember, a tax advisor will not judge you, so be open with your problems.

 

●      Keep essential documents

When going to meet a tax preparer for the first time, you can ask them what documents they need. Some essential documents include identification documents, income-related statements, expense-related statements, and tax-deduction documents. If you don't have any of these documents, don't worry: your tax preparer will assist you in dealing with this problem.

 

There is no doubt that taxes are complex, but everything goes smoothly when you find the right person to help you in tax preparation for entrepreneurs. Almost every person is stressed when preparing taxes for the first time, but there is nothing to worry about. Trust your tax preparer, cooperate, and don't panic!

Common Accounting Mistakes

 

Many people, like small business owners, manage their financial accounts themselves. In such cases, there are high chances of errors. Small mistakes can be easy to correct, but a severe mistake can affect the financial health of your business. Taking the help of a professional and hiring an accountant for freelance workers or small business owners can reduce accounting mistakes. In this column, we will learn about the top 4 accounting mistakes.

1. Failing to reconcile accounts

The first thing to do is recording cash flow and other financial data in your books. Then, you should also ensure that your bank account reflects the same balance as your books, transaction timing aside. A gap between the two can be an error that needs immediate action.

2. Not recording small transactions

This is a very common mistake. People often neglect small transactions and don’t keep receipts or records for them. Keeping record of every expense is essential to your business, no matter how insignificant it may seem: eventually, small transactions add up.

3. Not backing up data

Most people use accounting software for bookkeeping and/ or other operations. But along with the various advantages, there is a problem to this: if you lose your data and don't have it backed up anywhere, you will face troubles. There are high chances of data or financial information being lost, hacked, or stolen. So, it is essential to keep a backup of your data.

4. Lack of planning

Accounting and bookkeeping require excellent planning and organization skills. Tracking and storing your information properly is necessary. A small mistake or error may cause you trouble.

The final word

If you want to prevent these technical errors, avoid managing your own financial accounts. Rely on a professional accountant instead. It will reduce the chance of errors, and you will get better and more reliable results.

If you are looking for an affordable Certified Public Accounting firm that is an expert in company formation, then please know that at Agro Accounting CPA, we have a range of solutions that can help you in every aspect of your business. We do everything from tax preparation to bookkeeping, company formation & tax ID issuance, and audit representation.

A Few Tax-Simplifying Tips for Freelancers

Any growing business is easy to run when you have professional help, from managing cash flow and planning personal finances, to finding insurance.

While becoming your own boss is exciting, the extra work that you have during tax season can crush that excitement. If you are a full-time freelancer or are starting a side gig, the three tips listed below can help you get prepared for tax season.

1. Be Ready for More Forms

Be aware of the fact that your net profits are taxable. Get familiar with Schedule C—the form where sole proprietors report their business income and expenses. Also, keep in mind that you might need Schedule S.E. to calculate your self-employment taxes.

Hiring a professional accountant for freelancers is a great way to alleviate your tax hassles. However, if you are willing to do it yourself, then you need to be organized, confident, and operational in your specific business.

2. Get Organized

With self-employment, while you experience the excitement of managing your own business, you should also understand that your income is never constant, and often fluctuates. So, to avoid surprises during the year, estimate your tax liability. This way, if you are ever audited, you will be forced to prove the income and expenses on your tax return. To avoid such troubles, keep consistent records and save your financial documentation for at least three years.

Tip: If you feel helpless or stuck with your taxes, then employ income tax services for the self-employed from reliable professionals.

3. Understand 1099-NEC Forms

If your client pays you $600 or more during the year, you should probably get a 1099-NEC Form from them in January or February. This form demonstrates how much your client paid you over the tax year, for which you are required to report. Be as transparent as you can, because your client has the power to send a copy to the IRS, and the IRS will know what they paid you… even if you don't report that income on your tax return.

These are a few tips for freelancers in order to avoid further stress during tax season.

How Agro Accounting CPA Has Simplified Company Income Taxes for Artists

Company income taxes for artists have always been a volatile topic of discussion. Whereas an artist tries to dedicate a considerable amount of time towards honing his/her skills, there is no possible excuse that, in order to do so, their company income taxes have to take a back seat. In such a situation, the ideal thing to do is to reach out to an online CPA platform that can offer accounting services to streamline your finances in the most efficient and stress-free manner. If you find yourself swarmed in a similar circumstance, then it is strongly recommended that you reach out to the official website of Agro Accounting CPA. The following is a list of points to support this emphatic recommendation. Read on in order to get the details. 

• Experience 

The online CPA platform has considerable experience in offering accounting services to artists, freelancers and creative entrepreneurs. This makes the online CPA platform well-versed in various creative industries, so it can provide you with the right accounting professionals to get the job done for you and to streamline your accounting well. 

• Budget-Friendly 

The accredited services offered by the online CPA platform are easy to fit within most people’s budget. You will be very impressed with the services you obtain, and you will find that they are worth every single penny that you spend with Agro Accounting CPA. 

• Easy Accessibility 

Agro Accounting CPA is an online CPA platform, which makes it easy for you to access the services they offer year-round, 24/7. 

Hopefully, all of the points presented in this article will persuade you to reach out to, and connect with, Agro Accounting CPA. Their online CPA platform can present you with a full-fledged tax preparation guide for entrepreneurs, freelance workers and artists. Connect with the official platform at agroaccounting.com in order to become familiar with the full details.

How to Choose the Right Accountant for Freelance Workers?

Need some help with income taxes for freelance workers? Well, an expert accountant for freelance workers can help. However, choosing one is not an easy task. There are so many accountants out there that you can easily get confused about which one to choose! 

In this blog post, we will look at the four key tips to help you choose the right accountant. 

1. Check Certification 

The first step is to look for a Certified Public Accountant, “CPA.” To become a CPA, one first needs to have a Master’s degree in Accounting. The next step is for one to obtain licensing from the state. A valid license means your CPA has the above mentioned education level, has passed the necessary tests for licensing and has been endorsed by a longstanding CPA - all of which are proof of adequate accounting skills and training. 

2. Expertise 

The next step is to look for expertise. Not all accountants are the same: some are experts in managing taxes for regular employees, some are experts in income tax preparation for creative entrepreneurs, while others are experts in managing the accounts of big firms. If you are looking for an accountant for freelance workers, then look for an accountant who deals with freelancers and has expertise in freelance and/or small business taxes. 

3. Experience 

Industry experience teaches things to a professional that textbooks can’t. Therefore, it is always recommended to look for an experienced accountant. Such a well seasoned accountant knows the income tax laws inside-out and understands how to deal with the IRS on complex issues. 

4. Reputation 

Last but not least, the reputation of an accountant also matters a lot. You can get a good idea of the reputation of an accountant by reading their online reviews on reputed web directories. A strong accountant has positive reviews, good ratings and continuous recommendations from clients. Also, ask your accountant about their client retention rate and for references, if any. 

So, these are our four simple tips to choosing the right accountant.

How Much Income Tax Do Freelancers Have to Pay?

In 2019, 57 million people in the US indulged in freelancing work, and most of them reported earning handsome amounts. Everything is good as a freelancer: no boss, no timing restrictions, no extra expenses, no office, etc. The only thing that can trouble freelancers is income taxes for freelance workers, which sometimes seem unfair. If your net income during the year, as a freelancer, is more than just $400, you are liable to pay tax. So, it can be tough being a freelancer in the US! 

Recently, President Trump issued an executive order guiding the US Department of the Treasury to defer payroll taxes from September 1, 2020, to December 31, 2020. The executive order announced a deferral on the 6.2% employee’s share of Social Security tax, but it does not clearly say anything about self-employed or freelance workers. 

Today, in this blog post, we will discuss how much income tax a freelancer has to pay, typical deduction categories for freelancers and, first of all, discuss, how US tax law sees a freelancer. 

Employed vs. Self-Employed 

There is no such term as “freelancer” existing in the eyes of the law. Workers are primarily divided into two categories: Employed and Self-Employed. 

Employed workers are regularly salaried people employed by an employer. The employer manages taxes for its employees. 

Self-employed workers are those people that are self-employed and work directly for clients. They are their own boss and manage their own taxes, usually by themselves or with the help of a specialized accountant for freelance workers. Freelancers and business owners fall into this category. 

Now, let's find out how much income tax freelancers have to pay. 

Taxes Paid by a Freelancer 

A freelancer has to pay two types of tax: regular income tax and self-employment tax. All workers pay (“regular”) income tax, but freelancers are also liable to pay self-employment tax. Freelancers have to pay 15.3% of self-employment tax, which includes Social Security tax and Medicare tax. To follow, a regularly salaried person who works for an employer is also liable to pay a payroll tax, which is usually shared by both employer and employee. An employee pays a 6.2% Social Security tax and 1.45% Medicare tax, and an equal share is paid by his or her employer. However, as a freelancer is considered both an employee and an employer, a freelancer has to pay both parts. 

Deduction Categories for Freelancers 

Tax laws may seem a little unfair toward freelancers, yet there are many deductions available for them as well, which a regular employee cannot avail. Here are four primary tax deduction categories for freelancers:

Home Office 

If you are working as a freelancer, most probably, you have a home office. The IRS allows you to write off the expenses related to your home office, such as rent and cost of utilities. Nonetheless, it is your responsibility to ensure you are not using home office space or utilities for personal use. Writing off personal expenses may incur penalties. For this reason, it is advisable to hire an accountant for freelance workers while filing your income taxes, to become familiar with specific IRS rules and to avoid making important mistakes. 

Equipment 

If you are purchasing equipment for work purposes, then it is eligible for tax deductions. Such tax benefits are not available to regular employees. 

Education 

The IRS also allows you to write off the education costs incurred in upskilling to meet your business’ requirements. Your continuing education and certification costs are tax-deductible! 

Travel and Meal Expenses 

Lastly for this blog, you can also include business-related food and travel expenses at a rate of 50% in your tax deductions. However, it is strictly advised to separate your personal and business expenses in order to avoid any potential conflict with the IRS. As it is actually quite easy to make mistakes while filing your taxes when freelancing, experts advocate hiring an accountant consultant for freelancers to avoid any surprises.

Advantages to Be Reaped by Creative Entrepreneurs from a CPA Audit

Along with having to determine strategies to enhance your business growth, tax preparation for entrepreneurs is an additional responsibility that, sometimes, can be too overwhelming to handle. However, rather than spending a copious amount of capital to manage your accounting, undergoing an external audit might be a better idea. It will help you review your accounting process and come up with different options to escalate the financial growth of your organization. The following is a list of advantages that can be reaped by creative entrepreneurs from an external audit. Plunge into the details. 

● Validate Financial Data 

If you opt for an external audit, you will receive a CPA’s objective opinion on the financial processes and data of your organization. Let’s face it: it is difficult to have in-depth understanding of accounting peculiarities without relevant educational qualifications. Thus, an external audit can provide you with insight that otherwise might have been practically impossible for you to obtain on your own, and this insight will enable you to get a hold of the accountability and validity of financial information in your business. This could also pave the way for financing opportunities from investors and lenders in the future. 

● Find Errors 

An external audit can pinpoint all significant errors in your existing accounting system, which may be restricting cash flow and possible monetary gains for you. Once you successfully find these errors, make the necessary changes to carry out your production output in the best possible manner. 

If you need an accountant consultant for freelancers and small businesses to look into the financial aspect of your business and to help you manage your accounting more efficiently, then it is strongly recommended you reach out to a qualified professional like the certified public accountants at Agro Accounting CPA. They offer an online CPA platform that will present you with exceptionally well-designed and affordable accounting services. Visit the official website of Agro Accounting CPA in order to learn more.

Tax Benefits & Write-Offs for Freelance Workers that You never Knew About

Freelancing can be a tedious job because you need to take care of everything on your own, whether it is business planning, finances, serving clients, etc. Nonetheless, the government has bestowed upon freelance workers numerous tax benefits and deductions. Filing income taxes for freelance workers could never get any easier than what it is today! Yet, it is people’s negligence, truly, that keeps them from getting these benefits. If you are a freelance worker, it is essential that you be well-informed about everything concerning your income taxes. The following is a list of pointers explaining tax benefits and deductions for freelance workers that you might have never known about. Read on, plunge into the details.

● The Home Office Deduction

Most freelance workers work from home, which enables them to deduct part of their rent or mortgage payment, within the parameters of the home office deduction. In order to get yourself qualified for this deduction, it is essential you designate a particular space of your home as a ‘home office.’ The IRS requires that it be used exclusively and consistently for business purposes.

● Office Supply Deductions

The cost of office supplies is deductible, whether it is as minimal as paper, pens, staplers or printer cartridges.

● Travel Expenses 

Your travel expenses can also be deemed deductible if you travel solely for business purposes. Many people do not know this, but you can write off travel expenses to the extent a mixed-purpose trip has a clear and identifiable business element to it.

                 

If you are a freelance worker and if managing your accounting seems overwhelming to you, then it is highly recommended you reach out to an online CPA platform in order to file your taxes and save money with tax benefits and deductions. Agro Accounting CPA has an online platform that strives to present its clients with a dedicated team of professional tax preparers to assist with tax preparation for entrepreneurs. Visit the official website agroaccounting.com to find out more.

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.