By Megan King
Taxes can be frightening for freelancers. Here are 10 things that freelancers should be preparing for their accountant before tax season.
This is an obvious one, but make sure to have all your ducks in a row by gathering up your business information before tax time rolls around. That would include your: Social Security Number or Tax ID Number for your business, business name, business address, QuickBooks reports or any other accounting software that tracks your expenses. The more you're organized, the faster your accountant will be.
As a freelancer, you should be paying quarterly estimated tax payments for federal and state taxes. Make sure to meet with your accountant and discuss whether you should be adjusting your payments for next year. Also, discuss with your accountant as to the best amount and time to send your payments.
Don't forget to track all your mileage for your business trips and errands. Your accountant will take this into account.
If you hired others (ie. sub-contractors), you need to notify your accountant to create 1099s. Some accountants don't do this so make sure that you're prepared in advance. Things to track for your 1099s, 1) Name of Sub-Contractor, 2) Tax ID or SSN, 3) Amount paid during that tax year.
Make sure that your accountant is aware of any extra business profits or expenses that is not included on your Quickbooks report or spreadsheet.
Other companies that hired you as a sub-contractor will send you a 1099 as well. Include this within your paperwork for your accountant.
If you are an LLC, make sure that your accountant is aware of this. Also, don't forget to pay your yearly fee for doing business as an LLC.
Don't forget to notify your accountant of particular health expenses. For example, make sure to track your chiropractor or doctor visits during your tax year and make a note of them to your accountant.
If you can give your information to your accountant as PDFs, Excel Spreadsheets, etc, that is ideal. No need to waste paper when you don't have too. Just be smart in how you save those files.
Your accountant doesn't know what you're thinking... ask them that burning question. Many freelancers pay more taxes than they should because they assume that their accountant knows everything about their business.
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Guest post from our friends at FreelanceKit.