When you dived right into leaving your overwhelming yet safe job, did you ever think about the repercussions of your decision? Were you aware of the consequences of your compelling decision? We are not saying the decision you took was for the worse; we are wishing to emphasize the precariousness of your new circumstances. That said, becoming a freelancer comes with many challenges, but the worst of all -undeniably- is managing your income taxes for freelance workers. Getting your taxes paid and your bookkeeping ready for tax season are crucial parts of running a business. That is why we offer the following tax preparation guide for entrepreneurs, which can help you understand the basics of bookkeeping.
- Create a Separate Business Bank account
We cannot stress this pointer enough. Creating a separate bank account for your freelance business is a quick and easy way to separate your personal and business finances from one another. It makes your record-keeping easier and can provide you with a bit of a buffer for your personal assets, in the event of financial difficulty in your business.
- Set aside at least 30% for Taxes from your Profits
As a freelancer, it is your responsibility to be cautious about paying taxes. The rule of thumb is to set aside around one-third of each paycheck you receive, net of an estimated expense allowance, for taxes. It never hurts to double-check the dollar amount you keep aside for taxes with a dependable accountant for freelancers. To note, the percentage a freelancer owes varies from person-to-person based on a lot of factors.
- Hire an Accountant
Following the last pointer: you don’t want the burden of managing your accounting in addition to your freelancing job. Really. Unless accounting is your specialty, this is a service worth paying for. It would be best if you looked for a CPA firm that is home to dedicated and manageable professionals who can help you wade through the process of managing your accounting.
Agro Accounting CPA 