3 Benefits of Filing Taxes as a Freelancer
You have decided that you are going to freelance, and you are ready to take on the world. But before you do, you must understand what tax laws are in your situation. The good news is that filing taxes as a freelancer can save you money in the long run.
Filing Taxes as a Freelancer Has Advantages
It’s essential to keep in mind that filing your taxes as a freelancer has real benefits. Here are three of them:
Claim business expenses on your tax return.
As a freelancer, you can deduct any money spent on the business that is considered an ordinary and necessary expense. It includes equipment and office supplies. You can also deduct any money spent on advertising and marketing and travel expenses related to your business.
You should maintain good records of these expenses so they’re easy to find when tax season rolls around.
Establish your credibility as an independent contractor.
When you’re starting your freelance career, it’s hard to prove that you’re capable of doing the work. But filing taxes is one way to show your clients you are serious about your business. As a freelancer, you’ve got to keep your business legit.
Deduct the expenses that help your business produces income.
Make sure that you are taking all the credits and deductions you are entitled to by ensuring you understand all the benefits your business can take, you will save money from paying taxes and keep more of it to reinvest. When you’re an employee, you are very limited as to what you can deduct. So, one of the benefits of being a freelancer is the tax benefits & being able to deduct expenses that help make you money.
Freelancing is a great way to make money, but you must remember that you’re responsible for paying your taxes. It can be confusing initially but filing your taxes is much faster and far less overwhelming than you might expect. The good news is that tracking a business income versus a personal one isn’t too hard, and there are easy ways to file taxes as a freelancer that we haven’t discussed here. So if you want to simplify your finances, feel free to reach out, and we can help you.