Studies have revealed that a large part of the workforce will be freelancers in the future. With freelancing, you have the freedom of working from where and when you want. Being a freelancer will enable you to make more money than having a regular job with a fixed schedule. The thing that is limiting you from being a freelancer is taxes. Having some knowledge will make taxes seem easier than you thought. Below are some of the money-saving tips that will help you when filing freelance taxes given by check stub maker.
One of the tips that will help you save money is keeping track of all sources of income. Throughout the year, you may have various clients that you may be working with as a freelancer. When it comes to taxes and freelancing, it is vital for you to monitor all sources of income. Keeping track of all your customers and income will be possible if you make a spreadsheet. A designated new page on the spreadsheet should be assigned to each customer, and the projects due date, invoice sent, expected pay and payment received should be on the columns.
This format of doing things will help to know where the projects done for various clients are in the payment process. Making quarterly payments will help you to save money. Being a newbie freelancer, you may not know how to pay taxes. Paying taxes as a freelancer is more involving than a traditional job where your employer will deduct the tax from your paycheck. Doing freelancing work will enable you to be paid fully by your clients without accounting taxes.
For this reason, making quarterly payments is an excellent idea. You should set aside taxes as you get paid; this is another money-saving tip that will help you when filing freelance taxes. Taking taxes for granted is easy if you have a traditional job. Failure to plan taxes properly may make freelancers find it tough at certain times. Such circumstances can be avoided by starting a separate bank account for tax purposes only. When you are a paid for a project, you can transfer some amount of the money to the separate bank account for taxes so that you will not be tempted to use the money.
You should also not forget about deductions if you want to save money. You will be taxed on your net income minus your business deductions if you are a freelancer. Hence the more deductions you will have, the less your income will be taxed. You should track your expenses and save receipts throughout the year if you want to know your actual costs. Office equipment like computer, healthcare expenses and mileage for work-related travel are some of the expenses that you may have.