Tips for Filing Your Taxes When You’re Self-Employed

If you’re self-employed, there’s a lot to learn about how to handle your taxes. The more income streams you have, the more complicated your taxes can get. Whether you’re preparing them by yourself or you’re considering hiring a professional, here are a few things you should know about taxes for freelancers and contractors.

1. Consider paying your taxes quarterly. Once you calculate how much you owe, you can fill out a quarterly slip and send your payment to the IRS. At the end of the year, you’ll either owe a bit more or even get some money back. Since it’s rare to get money from your tax return when you’re self-employed, it’s a nice feeling to get a bit back, even if it’s only because you paid too much throughout the year.

2. Make sure that you keep track of your expenses throughout the year. For every expense, you need proof in case you get audited. Make sure that you have receipts or line items in your bank accounts. Keeping everything organized on a daily or weekly basis will save you a ton of time once tax season rolls around.

3. There’s nothing wrong with aggressively using write-offs. For example, if you’re a writer, you can write off anything that can be considered research, like books or magazines. If you ever write about travel, you may be able to write off some of your travel expenses. Talk to a professional to find out exactly what you can write off. This will save you from having to pay too much at the end of the year.

4. If this is your first time doing your taxes as a self-employed person, consider professional tax return preparation in Hawaii. Work with someone who’s willing to answer your questions or even show you how your taxes are prepared. That way, you can decide if you’re going to do them by yourself the following year.

Whatever you do, make sure that you don’t file your taxes late!

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