There is no questioning the fact that being a freelancer comes with many challenges. Whether it's catering to client needs or increasing business profits, a freelancer has a lot to do! Income tax filing is one area that needs proper care and attention. Even one small mistake while filing your annual income taxes can seriously impact your business. So, it's a great idea to hire income tax services for the self-employed, as it helps create effective tax strategies to save money on taxes and to avoid tax errors.
Let's learn about two costly, “basic” tax blunders that you should avoid:
Failure to Pay Self-Employment Tax
Freelancers need to pay self-employment taxes on their income. When your client provides you with a 1099 form, a copy also goes to the Internal Revenue Service (IRS). The tax authorities can double-check your income and even ask you to account for the tax money, if you're liable to pay taxes on it and haven’t reported it.
Lack of an Accounting System
A common mistake that freelancers make is failing to track their income and expenses because they don’t have a sound accounting system. Thus, the inability to maintain financial accounting records can make you pay more (or less) taxes than you really owe.
Wrapping Up
Dealing with freelance taxes can be a stressful task. But, proper professional assistance can save you from tax mistakes. So, hire Agro Accounting CPA, a professional accounting firm that helps with tax preparation for freelance workers, to reduce your tax liability. Visit agroaccounting.com today to learn more!
