Taxes for freelancers!
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- grafiske
I am not good at this game. Anyone know any solid online resources on the best ways to go about this?
Basically I keep a third of all my 1099 independent contractor stuff aside, use turbotax - claim nothing, and badabing.
Anyone have helpful tips?
- EKUL0
the best thing about freelance is write offs!
- inkpink0
get an accountant, or at least a cheap book keeper.
- inkpink0
i tried DIY accountanting for a few years, then one year when i was really late/busy broke down and paid someone else to do it...
long story short, when i got the minimal invoice for dumping my records on their desk and walking away, was a big "WTF was i thinking" moment.
don't pay someone to add up your receipts. do all that yourself, prepare a register, then hand it over.
you also learn a lot; how to prepare everything properly, what's legit deductions, etc.
- flashbender0
have someone prepare your taxes - it is going to cost you $300, but they'll save you a whole lot more than that with write offs.
... you claim nothing?!?!?! That's insanity. There is so much you can claim - electricity, internet, depreciation on your car if you drive to clients, depreciation of all computer equipment, the cost of media, magazines... it is a huge list and a decent tax person - especially if they deal with creative freelancers can save you a ton.
- Don't forget a percentage of rent if you work from home.graphiknature
- enfest0
Be prepared to pay A LOT
- flashbender0
as inkpink says, don't get an accountant - you can do al that yourself - but D get a tex person, a good one will explain to you what to write off and give some guidelines about what should and should not be claimed.
- inkpink0
wtf? i missed that point... you claim nothing!?!?
go to an accountant, like right now. and keep a receipt for it.
- yeah, keep receipts for everythingflashbender
- i mean... is there any other reason to freelance?inkpink
- mo' money if you have steady work?flashbender
- grafiske0
Haha. Thank you. I really have not made enough money in my lifetime to regret it, but I will certainly heed this advice.
- tkmeister0
you should definitely get an accountant. Also, you should open up a SEP IRA account and put 20% of your 1099 income into it to reduce your adjusted gross income so you pay less taxes.
There are so many ways to save money as a freelancer.
- Llantera0
get a tax person
- inkpink0
weren't you talking about submitting pieces to comm arts? wouldn't it be nice to deduct those entry fees?
- ********0
Any side work, I submit all 1099s and claim up to my income but still declare $100 profit. So I pay taxes on $100.
- grafiske0
INKPINK! You are right. Absolutely right.
Okay let's get down to the nitty gritty. Thus far in 2009 I have made 5 grand. I pay like 500 bucks a month in rent. I own a bike. I am keeping 1/3 aside. Is this necessary? Or can I go batshity crazy and just claim everything and not worry about keeping shit aside?
- ********0
okok slow down.
(use 25% for all your house hold needs)
apartment - $500 / 25
utility - $XX / 25
internet - $XX / 25
cell phone - $XX / 50%Did you buy anything in 2008?
- grafiske0
So you can claim 25% of your living expenses? What kind of documentation do I need for this? Everything is online.
I really don't buy much. My Imac is 2 years old. I build a desk out of a piece of plywood. My bike is also 2 years old.
I buy books sometimes?
- sputnik20
build an LLC immediately. 1099 will screw you.
- You dont need LLC if you dont make over $20k********
- sorry $10k********
- You dont need LLC if you dont make over $20k
- grafiske0
What is an LLC?
- Limited Liability Corporation. You can get one for around $125. Do you have to buy another one if you switch states though?graphiknature
- You can file online for about $50formed
- ********0
Online is perfect.
Save your receipt for "office" payment. And you claim 25% of that.You can claim depreciation of equipment for your computer, you look at the original cost and compare that to current market price. You deduct that. That goes for bike also.
Any paper or pens etc that you bought can be used for office expanse.
And books you can claim as research.
- ********0
SAVE EVERY SINGLE RECEIPT even if you think you cant claim it.
I have claimed cloths saying that I needed new cloths to present to clients. Still considered business expense.
- Life would b easier if you could use an itemized bank statement.graphiknature