Expenses that You are Tax Deductible When You are a Freelancer
The IRS considers freelancers to be self-employed and requires them to do their own taxes. Hence, you need to keep a record of your earnings for a given period as you will use it in calculating the taxes. You may challenge knowing all the forms to use for filing your taxes as a freelancer. 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. You will also get help calculating your taxes and paying them on time when you engage this personal CPA expert. Read more now to see the expenses that are tax-deductible when you are 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. With the receipts, it is easy to calculate how much money you have spent on office supplies. 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 other common expense that you are allowed to be tax deductible when you are a freelancer is meal expenses. However, it is not all meal expenses but only the ones you consume when on a business trip. 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. You also need to maintain receipts from the restaurant on the meals you consume on a business trip.
Business insurance is the other common expense you can write-off in your taxes when you are a freelancer. You may have an office which you have insured against fire when working as a freelancer. Thus, the IRS allows you to include the premiums as part of your tax deductibles.
When you have understood about the common expenses to write-off in your taxes, it is important you now try out the form 1099. 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 will now fill your taxes in the form 1099. You should consider finding the best CPA to fill the 1099 form for you.