Tax Filing Made Easy: Insider Tips for Newbie Freelancers in 2023!

In today’s day and age, freelancing is growing to be just as popular as traditional work positions.  Freelancing opens the door to many opportunities.  It allows you to exercise greater control over your working hours and to generate attractive income.  However, filing taxes can be challenging, especially if you’re a newbie freelancer. 

So, here are some insider tips that will make tax preparation for freelance workers in 2023 easier and hassle-free for you:

1. Collect All Your Tax Forms

Preparing your tax documentation is the first important thing to do while/before filing your taxes.  A freelancer receives Form 1099-NEC (Non-Employee Compensation) from a client who pays them $600 or more annually.

But, you don’t need to submit a record of your Form(s) 1099-NEC to the Internal Revenue Service (IRS) with your tax return.  While filing your tax return, it’s mandatory to report the total amount of business income that you received, as reported on all your 1099 forms and beyond.

 

2. Ensure That You’re a Freelancer

Employers frequently pay individuals who are employees, under IRS rules, as self-employed workers.  Because they are “free” from the burden of filing payroll reports and paying payroll taxes, doing this simplifies things for the employer.  Unfortunately, this is incorrect.

The IRS should consider you an employee if you truly are one.  This also applies to getting employee benefits and having payroll taxes paid for you.  Generally, if the employer directs your work, pays for your tools or other expenditures, and treats you like a permanent employee, then you are an employee.  You can visit the IRS website for further information.

 

3. Remember to File Applicable State and Local Taxes

You first might need business registration with your state or locality, based on the nature of your work.  Registration is mandatory if you use a business name rather than your own name.  You can hire income tax services for freelance workers to report your freelance income while filing your tax returns with the concerned authorities.

Wrapping Up

Tax preparation can be complex, and even a small mistake can lead to huge losses.  If you are a newbie freelancer, you should take up expert tax guidance to avoid facing any issues and to simplify your tax filing work.  Agro Accounting CPA provides affordable accounting for freelancers and income tax services that help with smoother tax preparation.  So, visit agroaccounting.com today to learn more!

Common Tax Filing Mistakes That Freelancers Should Avoid

Tax season can be daunting and challenging for new freelancers.  It’s crucial to avoid committing tax filing mistakes in order to meet the tax deadlines and to reduce stress.  Tax consulting for freelance workers can help ensure smooth and hassle-free tax filing for you.

So, here are two fundamental tax filing mistakes that a freelancer should avoid:

• Not Calculating Your Estimated Taxes

Your quarterly estimated taxes depend on your previous year’s earnings.  Making your tax payments is essential for avoiding penalties and unnecessary charges.  Failure to calculate your estimated taxes is a big mistake that can be avoided by careful planning.  So, make sure to set aside a part of your income for quarterly tax payments.

 

• Forgetting to Claim tax Deductions

A freelancer can claim deductions for business expenses, such as their home office, equipment, and software.  Some freelancers make the mistake of failing to deduct these expenses.  Visit the Internal Revenue Service (IRS) website and consult with a tax professional to learn about the expenses eligible for deduction.

Wrapping Up

You can avoid issues and guarantee a seamless tax filing process with adequate information and tools.  Agro Accounting CPA offers professional accounting and tax preparation for freelance workers to manage all your tax-related work.  Feel free to visit us at agroaccounting.com today!