Taxes for Freelancers: 5 Things Your Should Read Today

If you’re anything like me, you’re staring at a pile of tax information, knowing you need to get it done asap…

But of course, doing other things instead.

Now, I’ve been doing my own taxes since I was sixteen. And I’ve been a 1099 employee since I was 18, so I’ve learned a thing or two about deductions, self-employment tax, quarterly payments, and all that jazz.

But here’s the thing:

I’m terrible at explaining it to anyone else. So I’m turning to the experts.

If you’re new to the whole self-employment thing, or if you’ve recently developed a freelance or writing income and aren’t sure what that means for you this tax season, here are five articles you should read today.

And then tomorrow, let’s all buckle down and get those Schedule C’s done, right?

Five Articles on Taxes You Should Read Today

Tax Advice for Writers | Writer’s Digest

“How much will you have to pay in taxes? Any time you’re not working for W-2 wages—whether it’s a lone published piece, a whole portfolio full of them or even sales of a self-published book—you’re classified as a self-employed independent contractor. As such, your tax liability will be greater than if you were on payroll. When you find out how much greater, you’ll want to find all the deductions you can get. Here’s what you need to know to get started.”

Tax Tips for Confused Contractors | Daily Finance

“While handling a fluctuating income stream can be a challenge, many freelancers and contractors find the complications of paying taxes even more difficult. In fact, 16 percent of the freelancers surveyed by CreditDonkey.com said that at least once during their career, they haven’t had the money to pay their taxes.”

Tax Deductions for Writers | NOLO Law for All

“Are you a professional writer? That is, is your writing activity a business? If so, there are many deductions you can take to reduce your taxable income for the year, and thereby reduce your taxes. These deductions are quite valuable–for example, if you’re in the 25% tax bracket, each $100 in deductions saves you $25 in income tax. It will also usually save you about $15 in self-employment taxes as well.”

An Introduction to Schedule C | Kiplinger

“If you launched your own business last year, or took on a little extra work to pad your paycheck, let me introduce you to the Schedule C and its sister form Schedule SE, the forms most freelancers need to file with their 1040s. First of all, expect to dedicate a lot more time to completing your income tax forms. The IRS says the average taxpayer will spend more than ten hours working on the schedule C, including nearly two hours learning about it.”

What the ACA and New Home-Office Calculation Mean for You | Freelancers Union

“It’s a new year and that means it’s time to take note of the new financial realities and tax laws that apply to freelancers. Among them: Individual health insurance marketplaces on the state and federal level are continuing to enroll self-employed people for 2014 coverage under the Affordable Care Act; taxes are increasing on the wealthiest Americans; and the IRS has introduced a simplified method for calculating the home-office tax deduction.”

More Tips to Make Tax-Time Easier

1. Save for Taxes

You have to pay them every quarter when you’re self-employed, and then probably again at tax time. So make sure you have enough in the bank! If you’re not good at keeping track of what’s in your bank account, set up a separate savings or checking account just for taxes, and automatically transfer a set amount each month.

2. Keep Track of Expenses

Running your own business gets expensive, so keep track of what you spend. Use an accounting software to record business expenses as well as income.

3. Talk to a Professional

If doing your own taxes leaves you feeling overwhelmed and panicked, don’t do them. Hire an accountant to make sure everything is done correctly, and you’ll sleep easier at night.

4. Put It in the Calendar

Do you forget about paying your quarterly taxes? Then schedule them along with everything else! In the US, quarterly taxes are due April 15th, June 15th, September 15th, and January 15th. Put those dates in the calendar, and then put a reminder in two weeks before so you don’t forget to get them done.