Things Artists Should Know Before Filing Their Taxes

Like any other freelancer, an artist who has the intent to make a profit from their products or services is considered to be a business.  This means they are eligible to report earnings and losses and to deduct expenses.

1. Behave Like a Business

When artists report their income on Schedule C, they are agreeing with the IRS that they operate like a business, meaning they run the business to make profits.  However, people who make art without a profit are considered hobbyists and cannot deduct their expenses.

Keeping track of expenses can benefit artists.  These expenses can include things like studio rent or home studio space; art supplies, internet and phone bills, and more.  So, you can also include museum trips, research expenses, and travel expenses.  As an artist, you can even deduct travel expenses from visiting art fairs!

2. Use a Separate Bank Account for Your Art Activity

The IRS expects you to operate like a business, so you should refrain from mixing your personal and professional expenses under a single bank account or credit card.  This will also help you to calculate your taxes much more easily.  PS: Purchases you make on your business credit cards are a deductible business expense.

3. Find an Accountant Who is a Good Communicator

Finding a good accountant who helps with company income taxes for artists that won't leave you in the dark.  An accountant or tax advisor ensures that you don’t miss out on any deductions and also adhere to the tax code.

Agro Accounting is a trusted name in doing accounting for artists, freelancers, and small businesses.  You can contact us for tax preparation, accounting and business consulting, sales tax, bookkeeping, estimated tax calculations, tax relief options, and more.

2 Bookkeeping & Accounting Tips for Small Business Owners

You might be a small business owner that takes charge of various business operations.  However, keeping an accurate record of your finances and maintaining your accounts can be burdensome.  So, it's crucial to get affordable accounting for freelance workers to organize your financial accounts, whether you are keeping track of your monthly expenses, preparing your tax documentation, or paying your bills.

Let's explore two bookkeeping and accounting tips for small business owners.

1. Keep Business and Personal Finances Separate

As a freelancer, it's good to keep your personal bank and credit card accounts separate from your business ones.  Removing personal transactions from your business accounts can help reduce the number of transactions your bookkeeper needs to categorize and reconcile, for one :)

 

2. Get Reimbursed for Paid Business Expenses

 

You might face a difficult situation where you need to use your personal funds to pay for business expenses.  The company will then need to prepare a check to reimburse you for the expenses that you paid with your personal funds.

Wrapping Up

Managing your startup can be challenging, but you can reduce the workload by maintaining an accurate record of your finances from the very beginning.  Agro Accounting CPA is a renowned online accounting firm offering affordable accounting for freelancers.  Visit agroaccounting.com today for more details!

The Difference Between a CPA and an Accountant

 A CPA is a licensed accountant that has passed the CPA licensing examination, the latter which requires an accountant to meet certain eligibility conditions in order to even sit for the exam – such as work experience and education.  Concurrently, an accountant is an individual with a bachelor's degree in accounting.  CPA credentials are the main difference between a CPA and an accountant.  Not all accountants are CPAs, but all CPAs are accountants.

All 50 states require a bachelor's degree with at least 150 credit hours of coursework in order to become a licensed CPA.  Some states have minimum work requirements as well.  Generally, you should have one to two years of work experience to sit for the CPA examination.

If you are looking to hire an accountant for freelance workers to prepare your income tax returns, then it is always a good idea to hire a CPA.  A CPA is more skilled, qualified, and capable than a regular accountant.

Why Freelancers Need an Accountant for Tax Preparation

 When you start freelancing, it comes with a range of challenges.  Before – it used to be your manager or the company who took care of everything.  Now, you are the one who is responsible for managing all of your business activities.  When you work for a firm, you simply ask for a W-4 Form, fill in the details, and are done with taxes.  But, as a freelancer, it is not that simple or easy.  You need to learn what portion of your home’s rent and utility expenses you can write off, for example, and what expenses you are not eligible to deduct.  Thus, you need an expert accountant for freelance workers to guide you through your taxes.

3 reasons why freelancers need an accountant for tax preparation:

1. They do not know how to prepare taxes

Freelancers may be highly skilled in their area(s) of work, but they might not be skilled in doing tax calculations, navigating through tax laws, and deciding the right form for filing taxes.  Thus, they need an expert accountant for accurate tax preparation for freelance workers.  An expert accountant knows how to prepare taxes in order to maximize tax savings.

2. They do not have the time to prepare taxes

You can prepare taxes on your own if you are well-aware of the tax forms, qualified business expenses, state tax rules, special tax exemptions for your industry, and other such tax know-hows.  If you do not know these rules, then it might take you days (or more!) to learn them and to prepare taxes on your own.  Not every freelancer has the time to prepare taxes on their own.

3. It is simply not worth preparing taxes on one’s own

If you charge $40 per hour and spend 20 hours doing your taxes on your own, then it would cost you $800 in lost work opportunity.  At the same time, a CPA can prepare your taxes for $300.  Thus, choosing a CPA is an affordable accounting option for freelance workers!

If you are looking for income tax services for freelancers, then get in touch with Agro Accounting CPA for tax preparation for freelance workers.

5 Reasons Why You Need an Accountant for Freelancers in 2023

 There are many reasons to hire a professional accountant, especially from Agro Accounting CPA, for your income taxes.  They provide affordable accounting for freelancers.  The major one (the “biggie”) is that they are professionals in following rules and handling tax regulations.

Reasons you need an accountant for freelancers:

1. Familiar with tax laws

Tax laws are complex because of the federal, state, and/or local bodies, as each has different rules.

2. You're a freelancer

Being self-employed, you own or rent an office, have an Internet and phone plan; car mileage, and new equipment purchases.  A strong accountant can help a freelancer save a significant amount of money on taxes by wielding these spending's to your advantage.

3. Math is not for everyone

Taxes are entirely related to basic math and to organization skills.  A good accountant will know how to work through all this and render precise financial results to you.

4. You have several income sources

Having several income sources is great for your bank account, but it makes calculating taxes more complicated.  In addition, you may be eligible for extra tax savings that you are unaware of.

5. You will save time

Preparing profit and loss statements may take time, but an accountant knows how to do them fairly quickly.

Final word:

You can stay in contact with an accountant from Agro Accounting CPA all year to resolve all sorts of financial queries and complexities!

A Few Ways Accountants Help Business Owners Make the Right Business Decisions

There are several advantages to hiring an accountant for your business, and some provide affordable accounting for freelancers.  First, accountants understand what the numbers on financial statements represent and what problems they could be indicating. Hiring an accountant for your business will improve your ability to make decisions for it because, once again, accountants can see beyond the numbers on financial statements. 

Below are 6 ways accountants can help your business:

1. Start-Up Process

One of the ways accountants help business owners is by utilizing their financial knowledge to help set the business up for success.  For example, an accountant can help you select the right business structure.  In addition, an accountant will establish correct accounting processes that are organized and in compliance with government regulations.

2. Growth

Collaborating with an accountant can help a business flourish.  When companies are experiencing growth or trying to achieve new heights, accountants can help by providing business managers insight into cash flow management, inventory management, and tax preparation for entrepreneurs.  They can also prepare forecasts and budgets to help guide a business and ensure it is in line with the goals already established for it.  In addition, your accountant will ensure a smooth transition when you are going through any mergers, acquisitions, or business sales.

3. Operations

Accountants help businesses with regular operations by offering monthly preparation and analysis of financial statements.  The analysis will help managers make well-strategized decisions based on the most current data.  Business accountants can also help by overseeing payroll and estimating annual tax payments for their clients.

4. Regulatory & Reporting Compliance

Business accountants make sure that business owners are following government regulations properly.  In addition, they make sure that important deadlines are met— such as for tax filings.  Business accountants can also help a company during the audit process by offering the auditor accurate company data.  The presence of an accountant from the beginning ensures this process will go smoothly because the data will be organized.

5. External Financial Relationships

Businesses usually collaborate with many different financial organizations.  Accountants can manage these relationships and handle the work that firms must do for tax compliance, banks, or investors.

6. Avoid accounting mistakes

Accountants help businesses prevent financial mistakes that could cost them a lot of money.  An accountant will prevent small and large mistakes—from overdrafts to bank account reconciliations, to missing a tax deadline that could result in huge penalties.

Conclusion

Having an accountant for your business team will give you valuable insight that will help drive good business decisions.  Delegating this work to a part-time accountant will give managers and owners more time to focus on their business's operations. Agro Accounting CPA is a cost-effective solution for business accounting services.  The firm renders outsourced accounting on an hourly, onsite or remote, and part-time basis.  To learn more about the benefits of having a part-time accountant, connect with Agro Accounting CPA.

Hire Tax Preparation Experts for Entrepreneurs at Agro Accounting CPA

 When you own a business, there’s a lot to monitor, including daily operations, customer service, and increasing revenues.  Since all of this takes up time, it's easy to forget to keep an eye on your company's financial situation.

If you want to grow your business without letting financial matters get out of hand, then you will, now or later, need to hire a tax preparation expert.  They will help you manage your company's tax records, prevent hefty tax penalties, and ensure that your cash flow is constantly moving in the right direction.

Here are some of the benefits of hiring tax preparation experts for entrepreneurs:

• Reduces your tax liability:

An expert can analyze your financial transactions and monetary capacity in order to help you save money on taxes.  They can also take care of all your tax calculations and offer guidance on how to run your company so as to minimize your tax liability.

• Prevents hefty tax penalties:

Many business owners who fail to pay their taxes face penalties and even tax lawsuits for tax evasion.  However, with a professional on your side, you can reduce your likelihood of filing late tax returns, keeping you from costly late payment penalties.

• Helps your business grow:

Hiring a tax preparation expert for entrepreneurs can be a valuable source for you to gain expertise in controlling business expenses and recording losses.  In addition, they can also help you make well-informed decisions that are based on projected risks and expected outcomes.

The Bottom Line

If you're looking for a tax preparation guide for entrepreneurs, then Agro Accounting CPA is the name you can count on.  We are one of the most reputable online firms, with professional accountants that will make your tax-related work smooth and hassle-free.  Hire us now for great results!