Understanding how to file Taxes for Freelancers?

Are you often asked by fellow freelancers about their tax concerns and run out of answers?

Well, solving the income tax puzzle might be confusing for most of the people. But, we brought to you the ultimate guide to income taxes for you so that you never run out of answers for others and yourself.

If you are someone who is marketing yourself alone as a self-employed, we understand how difficult it is to do each and every task alone. Managing the taxes, payments, and delivering the results altogether by you could be hectic.

If you are using QuickBooks to manage your expenses and payments, it might be easier for you to calculate taxes and do other taxes. If you are unable to use the software to its fullest do not miss to use QuickBooks support phone number for all your QuickBooks technical support.

It is an added drawback if you have less or no knowledge about the taxes, you might end up in amounts full of penalties and interests; nobody wants that. If done right, paying taxes on your freelance earnings is not much difficult. Use these below tricks and tips and get your taxes done right.

Understand how to make tax payments

For an employee

Before we understand how we make tax payments, it is important to consider how employees pay their taxes. Well, there is no separate tax table for employees and freelancers.

The foremost difference between the two is that the employees pay passively and the freelancers or the independent workers pay quarterly i.e. actively.

For example, a worker who earns $50,000 in a year at an XYZ company applies for the IRS W-4 form in order to calculate his withholding from federal taxable income and also completes the state income tax form accompanied with the health insurance premiums.

XYZ Company keeps 25% of his withholdings for the federal tax, 5% for the state income tax and another 5% for the health insurance. The company submits the withheld to the IRS department and at the end of the year issues a W-2 form to the worker.

He/she is not required to take any other step by his own since he is registered with an organization that is doing this for him.

For a self-employed

If the worker decides to leave the XYZ Company after 4 years and work as a freelancer, he will be considered as the sole owner for the tax payment. Any informed CPA would recommend him to file his business and expenses under Schedule C of the personal tax Form 1040.

This is where it will get a hard task for you. If you are a freelancer, it is highly recommended to use QuickBooks. Contact QuickBooks technical support to know better. It is always better to speak to experts than to end up at nothing.

Reducing your taxable income is important

Business expenses could be complicated and are also dynamic in nature.  Also, there are expenses that might require a difficult process of documentation. Health insurance, retirement accounts, and home office expenses are the most commonly known expenses, read more about them below:

Health Insurance

If you are paying for your health insurance premiums, you must know that they are also counted under deductibles. It is expensive if you are paying it alone, while you are only getting deducted with 5% as an employee. You must consider adding this extra cost while you are charging from your employees.

If you are looking for help with this section, do not hesitate to speak to QuickBooks support by dialing QuickBooks support phone number +1(877)222-0815 and get instant help.

Retirement accounts

If you are worried about retirement plans, do not worry. There are some retirement plans that are considered as deductibles under Schedule C.

Home office expenses

There might not be any deduction on the home office expenses. Your smartness won’t work when the IRS will come to review your tax reductions closely. Make sure that you have a proper record maintained for your home office expenses.

Now, you can manage all your expenses under one roof in QuickBooks. If you are looking for any help with QuickBooks technical support, do not miss to dial QuickBooks support phone number and get instant support.

Reach QuickBooks support for your technical snags with the software.