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. It is therefore up to you to calculate your income for the years and determine the taxes you will pay. You may challenge knowing all the forms to use for filing your taxes as a freelancer. To overcome this obstacle, it is smart you seek the help of the best tax consultant near you. With the help of this tax consultant, you will abide by the regulations set by the IRS for freelancers. You will therefore avoid penalties from the IRS when you hire the best personal CPA near you. 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. The great thing is that you have the option to deduct the office supplies expenses when calculating your taxes. Hence, make it a habit to file all the receipts you sell from the office supplies vendors. With the receipts, it is easy to calculate how much money you have spent on office supplies. You can also use the receipts as evidence if the IRS requests for them.
The other common expense that you are allowed to be tax deductible when you are a freelancer is meal expenses. However, it is not all meal expenses but only the ones you consume when on a business trip. It is wise to know that meal expenses cannot exceed a given limit. Therefore, you cannot take advantage of this tax write off to take super expensive meals when on a business trip. Ensure you keep the receipt for the meals you deduct the expenses from the taxes you pay.
You will also enjoy business insurance expenses write off on your taxes when you are working as a freelancer. You may be paying insurance for the car you use 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. You are supposed to know that there are different types of forms. 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 should know that the places that are appropriate for you to fill the taxes are in the form 1099. You should consider finding the best CPA to fill the 1099 form for you.