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Step 1
Plan ahead, do not wait until the year is over to get the books caught up. Create a separate account for your business, in order to keep financial records more organized. Taxes must be filed by April 18th of every year.
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Step 2
Do not forget to pay your estimated income taxes for self employment on a quarterly basis to the the federal government and your state. If payments are not met regularly, the tax will have added fees at the end of the year.
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Step 3
Yearly you must pay social security taxes for the self employed. Be for warned that these taxes will a higher percentage of your earnings then what you pay when employed.
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Step 4
It is best to seek the advice of a accountant that has experience working with freelancer's taxes. Accountants will be able to guide your investments and expenditures to benefit your tax deductions. Experienced accountants will also be able to find the right deductions for your business to off set high self employment taxes.
Comments
benwest2 said
on 1/26/2009 This is good, solid info. See my article on estimated tax payments to learn more about them.
bethjess39564 said
on 12/2/2008 Great info. Taxes are easier to pay before added fines are added by the govt.
MeganK said
on 11/29/2008 Nobody likes paying taxes :( but your article provides some good info.
Creativehearts1 said
on 11/26/2008 Important info to keep in mind. Especially #2. Thanks!