Working as a freelancer can have a lot of benefits, from a flexible schedule and the freedom to travel to the feeling of being your own boss. One thing you lose, though, is having the established structure of a company that takes taxes and other withholdings out of your paycheck automatically.
As such, your process for filing your taxes will be different than that of the average taxpayer. Our Sacramento area experts can help shed some light on what you need to know.
Paying Estimated Taxes
For most taxpayers, taxes are estimated and withheld during each pay period. If you’re freelancing, though, you need to estimate your taxes during each quarter; our Sacramento team can help with this process. This helps you to avoid owing back taxes for the year all at once come filing time, which is certainly in your best interest, but it’s also worth noting this is not just a suggestion but a requirement for freelancers making more than $1,000 per year.
Plan for Tax Day
While estimating your taxes quarterly goes a long way toward keeping things in order, it’s important to keep taxes in mind on a regular basis rather than only thinking about taxes four times a year. To help you stay on top of things throughout the year, we suggest taking a few steps to prepare for tax day.
- Open a savings account to set aside a percentage of your income for anticipated tax payments
- Keep a designated document or notebook in your workspace to note tax related questions or issues as they arise
- Track business expenses and receipts for possible deductions in one place
- Note your mileage for business meetings as they happen so that the information is handy when you need it
With a bit of planning throughout the year, filing your taxes is even easier when it’s time to meet with our team and get things set. If your records from last year are in less-than-immaculate order, don’t fret; our trusted tax experts can help you regain control and ensure that everything is filed correctly.
For more information, or to schedule a consultation for your tax filing needs, be sure to contact Paramount Tax Relief by calling (916) 533-9940 today.