Working as a Freelancer? Here are Common Expenses to Write-Off in Your Taxes
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. To ease your work, it is wise you search for the best personal CPA near me. With the help of this tax consultant, you will abide by the regulations set by the IRS for freelancers. You will also get help calculating your taxes and paying them on time when you engage this personal CPA expert. Read more now to see the expenses that are tax-deductible when you are a freelancer.
To run a freelancer agency, you may have to spend money on office supplies, thereby lowering the profits you generate. Thus, you can subtract the office supplies from your income when calculating your taxes as a freelancer. Hence, make it a habit to file all the receipts you sell from the office supplies vendors. The goal is to have a record to use when calculating the total office supplies expenses for the year. The receipts can also serve as evidence when you have a dispute with IRS on the taxes you are supposed to pay for the year.
You can also deduct the meal expenses when working as a freelancer to reduce the taxes you pay. 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. You also need to maintain receipts from the restaurant on the meals you consume on a business trip.
Freelancers are also allowed by the IRS to deduct the business insurance expenses from their incomes when calculating the taxes. You may have an office which you have insured against fire when working as a freelancer. Thus, the IRS allows you to include the premiums as part of your tax deductibles.
When you have understood about the common expenses to write-off in your taxes, it is important you now try out the form 1099. The 1099 forms come in various types. You should know the way you are supposed to fill the 1099 form that you get. When various people owe you some money, that is when you are required to take the 1099 form. You will now fill your taxes in the form 1099. Hiring a CPA will be the best idea since he will show you how you are supposed to fill out the form 1099.