Common Expenses that You Can Deduct from Taxes When Working as a Freelancer
The IRS considers freelancers to be self-employed and requires them to do their own taxes. As a freelancer, you must keep accurate records of the payments you get from clients as you will use the record to determine taxes to pay. It may headache for many freelancers to learn the right way to do the taxes. You can hire the leading tax consultant in your area to help you file your taxes when you are a freelancer. With the help of this tax consultant, you will abide by the regulations set by the IRS for freelancers. The goal is to ensure you pay the right tax amount and deduct various common expenses. Read more now to see the expenses that are tax-deductible when you are a freelancer.
The money you spend on office supplies is a business expense that lowers income. The great thing is that you have the option to deduct the office supplies expenses when calculating your taxes. Therefore insist on getting a receipt with every order of office supplies you receive. You will therefore have a source of data for determining the cost of office supplies for a given year. You can also use the receipts as evidence if the IRS requests for them.
The meal expenses is the other tax write off you will enjoy when you are a freelancer. However, it is not all meal expenses but only the ones you consume when on a business trip. Understand that you can only put reasonable meal expenses. Therefore, you cannot take advantage of this tax write off to take super expensive meals when on a business trip. It is important to file the meal receipts after the business trip.
Freelancers are also allowed by the IRS to deduct the business insurance expenses from their incomes when calculating the taxes. You may be paying insurance for the car you use as a freelancer. Hence, you need to keep a record of all the premiums you pay to deduct them from your income.
When you have understood about the common expenses to write-off in your taxes, it is important you now try out the form 1099. It is essential that you know the different types of the 1099 forms. You should know the way you are supposed to fill the 1099 form that you get. The 1099 form is given to customers who owe you a certain amount of money. The form 1099 is the one that you are required to file your taxes. Hiring a CPA will be the best idea since he will show you how you are supposed to fill out the form 1099.