- Personal Finance
How to prepare your Taxes as a freelance writer
Preparing your Taxes as a freelance writer.
What do you need to know about filing for taxes for the first time.
If you are a freelance writer, and you are planning to file for taxes for the first time this year, congratulations! This means, that somewhere along the way, you've made money from your work.
If you have made more than $400 during the entire year as a freelancer, you need to file for taxes. Make sure you have collected all of your payments, business transactions, and paperwork that you have received from your employers, or from the places where you write, to make this part of the business a bit easier.
Filing for taxes for freelance writers is actually very different since you are self-employed. You will need to gather all of your 1099's or schedule C, 1040EZ and Sch SE if you didn't receive any 1099 through out the year.
Once you have done this, the process can be a bit easier, or less frustrating if you are good at math, and if you can recall all of the things that has helped you run, improve or manage your business through out the year.
If you are filing for taxes for the very first time, then you pay attention! This process can be intimidating at first, but its easy if you have everything that you need.
Before you start doing anything online that has to do with your taxes, make sure you visit the IRS homepage to get the newest forms, and to see if there is any thing new that you need to be informed of. IRS.GOV has everything that you need if you have questions, or if you did not receive any paperwork from your employers. It is important that you gather all of the basic paperwork BEFORE you start filing your taxes. This can save you from being audited later on.
When you are preparing all of your paperwork, and looking over your net worth, make sure you list any and ALL of the people that have paid you, and ALL of the websites where you have earned money. It really does not matter if you earned money, but haven't gotten paid yet, because you can still put it in your taxes. This will also help you with the expenses later on.
What you need to file.
As I've explained earlier, a couple of the forms used the most by freelancers are the Schedule C, Sch EZ and 1040 or Schedule SE to figure out your self-employment tax, which includes your social security and medicare taxes.
These are the most basic and useful pieces of paper that you need if you are a freelancer, and you've made more than $400 last year.
In theory, filing for taxes is relatively simple. Since all you are doing is:
Adding your income, deducting what you use, and seeing how much you are getting back. However, as freelancers, you know that not everything we use can be deducted (even though it should be) and all of the things we can deduct, it can be hard to figure out just how much we use.
So, lets make deductions easier.
What can you deduct?
Almost everything that you use to run your freelance business, you can deduct. So, what do you use?
- Your Computer
- Postage stamps
- desk (if you bought one)
- Gas (if you drive to meet a client)
- Books, notebooks and other expenses.
There are other deductions that you can look through, however, these are the most common things to look for. If you have more questions about what you think you can deduct, you can call the IRS to ask for help, OR you can also get your taxes checked out for free through any online company. The most popular companies to use today include: TurboTax, H&R Block, and the IRS webpage.
Preparing for the following year.
If you are done preparing your taxes, then give yourself a pat on the back! You've managed to complete a task, that many freelancers are still putting off! Now, is the time to start preparing for next year. Keep an accurate track of all of your paperwork, and make sure you have your taxes for this year put away neatly to help you prepare your taxes NEXT year. This is the part that too many freelancers do not think about, and it is CRUCIAL when it comes to doing taxes through out the year!
Save as much money as you can through out the year, to make sure that you can pay off any taxes later on. Also, if you are not paying off taxes in your paycheck through out the year, then you must file a 1040 every quarter to avoid any problems with the IRS and unpaid fees. Trust me, these can add up QUICK!