Expenses that You are Tax Deductible When You are a Freelancer
When working as a freelancer, you are required by the IRS to do your own taxes. It is therefore up to you to calculate your income for the years and determine the taxes you will pay. It may headache for many freelancers to learn the right way to do the taxes. To ease your work, it is wise you search for the best personal CPA near me. The specialist will help you know the IRS requirements for freelancers to follow. You will therefore avoid penalties from the IRS when you hire the best personal CPA near you. 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. Thus, you can subtract the office supplies from your income when calculating your taxes as a freelancer. Therefore insist on getting a receipt with every order of office supplies you receive. 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.
You can also deduct the meal expenses when working as a freelancer to reduce the taxes you pay. However, it is not all meal expenses but only the ones you consume when on a business trip. It is wise to know that meal expenses cannot exceed a given limit. The IRS will not accept extravagant meal expenses. It is important to file the meal receipts after the business trip.
You will also enjoy business insurance expenses write off on your taxes when you are working as a freelancer. You may be paying insurance for the car you use as a freelancer. Hence, you need to keep a record of all the premiums you pay to deduct them from your income.
form 1099 is another thing you should keep in mind once you know about the common expenses to write-off in your taxes. 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. When various people owe you some money, that is when you are required to take the 1099 form. The form 1099 is the one that you are required to file your taxes. You should consider finding the best CPA to fill the 1099 form for you.