8 Tax Tips for Freelance Professionals

Posted: February 21, 2012

[caption id="attachment_9793" align="alignright" width="386"]© iQoncept - Fotolia.com[/caption]It’s that magical time of year, when families gather 'round the computer and offer each other gifts of receipts, earnings statements, and Form 1040s. We're talking about tax season. Filing taxes can be a, shall we say, challenging experience under normal circumstances. And for freelance professionals, tax season can offer a different level of frustration as you hear all sorts of advice from a variety of sources. So, to make things easier for you, we went straight to the source - accounting and tax professionals - to get the low-down on a number of common freelance tax questions. Here are eight tax tips for freelance professionals.

1) Take your time and review everything. “You have to spend time reviewing all of your expenses since you pay federal, state taxes, social security and medicare on your net income from your business. Therefore, each deduction lowers all of these taxes. For example: if you live in NJ; between federal, NJ, social security and medicare you are anywhere between the 25% - 57% bracket. Therefore for every extra $1,000 of deductions you come up with you save $250 to $570 in cash!”
- Gail Rosen, CPA www.gailrosencpa.com

2) “Know which deductions you might be entitled to. “I see a lot of tax returns and no less than nine out of ten returns have mistakes and missed tax savings opportunities. Deductions you could be missing include medical benefits, home office expenses, car/truck expenses, and meal and entertainment costs.”
- John Beidle, Enrolled Agent and President of 1040 Wealth Designs

3) Take advantage of tax software’s help. “Ask for help. Tax software providers offer assistance. Don't be afraid to call. And realize when you're in over your head. There are times when there is no substitute for a seasoned professional, who could end up saving you more than they charge.”
- Starr Cochran, EA, CFP www.starrcochran.com

See the complete list of 8 Tax Tips for Freelance Professionals

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