No clock to punch, no boss over your shoulder, no asking for days off--being a freelancer, whether it is a freelance writer, website designer, or otherwise, sure sounds like a dream come true. But when April rolls around and tax time hits, your life as a freelancer may seem anything but dreamy. Being in charge of your own employment means gone are the days of a simple 1040EZ tax return. It will probably just take you one tax-filing season to be driven to one conclusion: you do need professional help (in the form of a CPA, of course). Here are a few advantages you can gain by allowing a CPA to complete your taxes as a self-employed freelancer.
Save yourself the time...and the grey hair.
When you are unfamiliar with things like itemized deductions, self-employment tax, and allowable employment expenses, you might spend hour after hour running differing scenarios, sifting through receipts, and trying to put down figures. Not only is it time-consuming to file your own taxes as a freelancer, the whole idea that you could be audited by the Big Bad IRS if you do something wrong can definitely bring on a seasonal growth of grey hair. A qualified CPA is familiar with tax terminology, can track down allowable business expenses without batting an eye, and can get your taxes done much faster than what you could even consider.
Take advantage of expert advice and keep some money in your pocket.
Being self-employed will mean you will see a hefty tax on your income. Not only will you have to pay a Social Security tax of 12.4 percent (as of 2016), you will also be responsible for Medicare tax of 2.9 percent and more if you make over $200,000, but half of this can be deducted. Sound like a lot? You can definitely end up with huge tax bills as a freelancer, but hiring a CPA means you have an expert to help you find as many deductions as possible. From complicated home-office deductions to seemingly unimportant expenses like staples and paperclips, your CPA will find every possible, perfectly allowable deduction to save you the most money.
Consider hiring a CPA as an investment in your own business endeavors.
Not only can hiring a CPA help you lower your tax bill as a freelance, hiring a CPA is like making an investment in your business. Filing your taxes as a business owner is complicated and a hassle, but part of the equation when you are self-employed. The only problem is, wrong moves can lead to an audit by the IRS, and audits are never a good thing when you essentially have your own business to worry about.
For more information, contact a company like Amos Maney & Payne CPA's LLC.