Working as a Freelancer? Here are Common Expenses to Write-Off in Your Taxes
The IRS considers freelancers to be self-employed and requires them to do their own taxes. It is therefore up to you to calculate your income for the years and determine the taxes you will pay. It may headache for many freelancers to learn the right way to do the taxes. To overcome this obstacle, it is smart you seek the help of the best tax consultant near you. The specialist will help you know the IRS requirements for freelancers to follow. The goal is to ensure you pay the right tax amount and deduct various common expenses. Here are common expenses to write-off in your taxes when working as a freelancer.
To run a freelancer agency, you may have to spend money on office supplies, thereby lowering the profits you generate. The great thing is that you have the option to deduct the office supplies expenses when calculating your taxes. It is, therefore, necessary you keep all receipts after you purchase various office supplies. The goal is to have a record to use when calculating the total office supplies expenses for the year. The receipts can also serve as evidence when you have a dispute with IRS on the taxes you are supposed to pay for the year.
The meal expenses is the other tax write off you will enjoy when you are a freelancer. When you take a business trip, you will take meals, and you are allowed to deduct these expenses on the taxes you pay. Understand that you can only put reasonable meal expenses. Therefore, you cannot take advantage of this tax write off to take super expensive meals when on a business trip. Ensure you keep the receipt for the meals you deduct the expenses from the taxes you pay.
You will also enjoy business insurance expenses write off on your taxes when you are working as a freelancer. Maybe you have insured your business car or building. Thus, the IRS allows you to include the premiums as part of your tax deductibles.
It would be best to search for the details about the 1099 form after you are done with knowing the expenses to write-off in your taxes. It is essential that you know the different types of the 1099 forms. You are required to know the ways in which you are supposed to fill out each form. You are also required to know the person who you are to give the 1099 form. You should know that the places that are appropriate for you to fill the taxes are in the form 1099. When you are filling out this form 1099, you might be confused on how to go about it, and by this, you are supposed to hire a CPA.