Tip For Organizing Your Tax Information For Your Freelance Writing Business
Posted on: 23 February 2016
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If you work from home as a freelance writer, then it is important for you to organize all of the information necessary to file your taxes each April. By keeping documents organized throughout the year, you can be prepared to file your taxes without having to root around looking for all of the paperwork that you need to file. In addition to keeping all of your receipts in one place, follow these tips to keep your tax obligations simple for your freelance writing business:
Keep Your Business and Personal Finances Separate from Each Other
Even if your clients pay you with checks that are written out to you personally or through a personal account at a payment processing service, you should always keep your business and personal finances separated from each other. Use a separate account for all of your business income and expenses in order to keep things much simpler each year at tax time. If you use a personal account, then do not use it for anything else and set up a different account for your business finances. By splitting your finances, you can easily look at the statements for your business accounts and determine your income and expenses without having to wade through all of your personal expenses.
Calculate Your Estimated Payments for the New Tax Year and Pay Them On Time
Since you are required to make estimated tax payments each quarter for your freelance writing business, you need to calculate them at the beginning of each new year, and then make sure that you pay the newly calculated amount to the IRS each quarter. If you simply pay the same amount that you did last year, then you may find yourself with a large tax bill as your business grows and you have more income.
Seek the Guidance of a CPA Early in the Year
Finally, you should make an appointment to see your CPA early in the year to speak about your unique tax situation and learn how you can get the most out of your freelance writing business income. By visiting outside of the busy tax season, your CPA will not be overwhelmed and tired from the busy season, and they will be able to dedicate more time to helping you create a long-term strategy for your business's financials. Even if you file your own taxes, you should still use the services of a CPA at least once each year to ensure that your taxes are correct and that you are getting the maximum number of deductions possible. Contact a CPA for tax preparation in your area.