Five Best Tax Tips for Side Hustlers and Freelancers

Hey there, side hustlers and freelancers. Are you ready to learn how to save money on your taxes? We've compiled a list of five tax advice pieces from expert tax services in Decatur to assist you in paying less taxes and maintaining compliance with the law.

As a side hustler or freelancer, you have unique tax considerations. You're not an employee, so you're responsible for paying your taxes. This may look daunting, but it's easier than it seems.

Let's get started!

1. Keep Accurate Records 

This is essential for tracking your income and expenses. You should keep receipts for all business-related expenses and maintain a mileage record.

2. Deduct Eligible Expenses 

You can subtract various expenses from your business revenue to reduce taxable income. These may include but are not limited to:

• Home office expenses
• Travel expenses
• Equipment expenses
• Marketing expenses

3. Pay Estimated Taxes 

You must pay estimated taxes if your anticipated tax liability exceeds $1,000. Four payments can be made during the year to pay estimated taxes. Your estimated taxes can be computed and paid using Form 1040-ES.

4. Choosing the Perfect Business Structure

The tax you owe will depend on the business form you choose. Corporations and LLCs pay taxes differently than partnerships and sole proprietorships. To select your ideal business structure, speak with a tax professional.

5. Be Aware of Self-Employment Taxes

Self-employment taxes are the equivalent of Social Security and Medicare taxes that employees pay. Self-employment taxes are paid in addition to income taxes.

6. Make Quarterly Tax Payments

You must make quarterly tax payments if you anticipate paying more than $1,000 in self-employment taxes. To compute and make your quarterly tax payments, utilize Form 1040-ES.

Get Help from a Professional Tax Service Provider in Decatur

If you are unsure about preparing your taxes, consider getting help from a tax professional. Collaborating with a tax expert can help you file your taxes accurately while maximizing your eligible credits and deductions.

Additionally

• File your taxes on time. If you file your taxes late, you may have to pay penalties and interest.
• E-filing your taxes is the quickest and most accurate way to file. You can do this through the IRS website or using tax software. 
• Keep a copy of your tax return. This will help you if you need to make any changes or if the IRS audits you.

Conclusion

By following these tax tips, side hustlers and freelancers can stay compliant with the tax laws and save money on their taxes. If you need help with your taxes, consider using a reputable Tax Services Decatur. A tax professional can help you to maximize your refund and avoid costly mistakes.