Tax season feels eons away for many workers gainfully employed.
Why bother thinking about W-9s that will come in January when Halloween, Thanksgiving and Christmas are coming before the tax forms.
Not to mention the New Year, Valentine's Day and the day of St. Patrick all occur before taxes are still due.
But for some workers, the tax season is marked by periods of three months, not 15 April.
pay quarter against a year
"I do quarterly payroll," said Kali Hawlk, a freelance content marketing manager. Hawlk also pays taxes estimated using the IRS form 1040.
Freelancers, part of the ever-growing workforce, getting the distinct pleasure of being their own boss, but in turn have to take more financial responsibility
this responsibility is a duty to pay the government its cut -.. often higher than those of the employed company people
"as someone who is self-employed, you have no one who cares for your deductions for you, "said Hawlk." We must take into account federal and state taxes, as well as employees and employers social security and halves Medicare taxes. It is much more responsibility to follow what you need when you are self-employed. "
Although she likes to be his own boss, admitted Hawlk a common frustration of being independent is the need to earn more than when she was an employee.
According Hawlk , freelancers need to earn 25% more than their gross income employees to take account of taxes and additional spending. Tweet this
Do not let the feeling for a bargain deceive you
Freelancers complete tax forms required by their customers, but these customers often does not hold back taxes from a paycheck.
"he is sometimes nice to get that fat salary until you realize how much goes to uncle Sam, "says Tonya Stumphauzer, founder of the budget and the beach.
Remember, much of this income should be set aside for taxes so that you are not in trouble when quarterly taxes are due.
How do you stay organized?
Freelancers need to have impeccable organizational skills - at least in terms of accounting. It is important to keep track of all receipts, invoices, forms and tax expenditures.
"I use Nutcache to create and track expenses," said Hawlk. "It is a very simple but free accounting system. You can make nice, professional looking invoices and quickly see what is paid and what is pending "
Hawlk prefers to follow his gross earnings, expenses, net income and pension contributions in a way more old way -. An Excel spreadsheet.
Stumphauzer using other software, but also prefer to stay simple.
"I use Freshbooks for invoicing," said Stumphauzer. "But to the extent that the expenses I rely on my bank statements and credit card statements for the most part, and the registration of all I received a special folder throughout the year. After six years as a freelancer you would think I would have a fancy software, but I do not. "
Some may hire an accountant, but you do not have to
freelancers have a lot of paperwork to follow, including the ES-1040 form to pay estimated taxes quarterly, 1099s and W-9s customers. Some freelancers prefer to hire an accountant, but the movement is unnecessary.
In fact, TaxAct offers two solutions for self-employed. both the federal free edition and Deluxe software include form 1040 with schedules C and SE.
There is a simple interview asks straight-forward questions about income, losses, expenses, deductions and credits where TaxAct then automatically calculates and enters the data into the appropriate tax forms.
How freelancers save for retirement and get a tax benefit? get
full-time employees often benefit from an employer-matched 401 (k) or similar retirement funds. Although there is not an employer match, Hawlk is always sure to always participate in a large tax-advantage for independent.
"Anyone who has self-employment income, whether you are full time or simply do work on the side - should open a SEP IRA," she says. "Your contributions to the retirement account can be extremely helpful to lighten your tax burden during the year. In addition, you'll raise money for your future. Win-win!"
I work full time and just freelance on the side. Do I have to pay quarterly taxes?
Just because you have a constant 9 to 5 does not mean that your freelance work does subjectable quarterly taxes.
Freelancers Union provides a break when a freelancer must begin paying quarterly taxes:
- If you paid more than $ 1,000 in taxes in 2013 (the fiscal year just ended), you must pay quarterly taxes in 2014.
- If you expect to pay more than $ 1,000 in taxes in 2014, you must pay quarterly taxes in 2014.
- If you paid no income tax in 2013 (or obtained a refund), you probably do not need to pay quarterly taxes in 2014.
Be prepared to pay the Piper (or uncle Sam)
Being a freelancer and independent release is for many, remember to have enough saved for tax season. Tweet this
#YouGotThis
Photo: Sculpt
0 Komentar