Tax season: The most stressful time of the year.
Many small business owners, such as freelancers and entrepreneurs, don’t know what taxes they need to pay or even if they have any tax deductions at all.
As for the freelancer, that`s entirely a different story. Does any freelancer need to report cash flow for each project? How do you report it? Do you need to pay taxes even though you, as a freelancer, don`t have a steady cash flow?
Let’s make things clear:
Know Your Tax Basics
Everything you need to know can be found on the IRS Website. I agree that the website has a lot of information, but you will need to take some time and find the correct information for you.
You can also find a bookkeeper that will help you with what taxes you need to pay as a freelancer if that is more suiting to your needs.
One Size Does Not Fit All
To pay your taxes and see what you need to pay, you have to know what kind of company you are considered to be. Are you a freelancer or one person qualifying as one small business? Make sure you know the answer to this question.
This is where everything gets easy. When you use an invoicing tool, such as Sighted, you can get all of the reports in few minutes, such as income, expenses, outstanding invoices and total revenue ─ all which are ready for you in one click.
When getting ready for tax season, we all can use all the help that we can get.
People are spending money on things that they don`t need, and when we talk about a bookkeeper, we seem to think that it`s expensive to use one. However, giving your books and financial records to a professional will save you so much time and a headache.
Of course, you might think that it will be expensive, but you need to spend money to make money.
Depending on the state you are living in, you probably need to have a tax number. You might need to register for a special tax on each trade, every product you sell or even service you provide. Also, you need to add this to every single invoice you send out to have a correct tax statement.
Tax season is always stressful. We usually don`t know what taxes to pay, how to prepare our books, and if we need to pay as a freelancer.
To avoid the headaches, make sure you have answers to all of your questions, have your financial records ready, and be sure you know what taxes are you paying.
And remember, in the end, you can always hire a professional or use an invoicing service, such as ours here at Sighted.