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Common Expenses that You Can Deduct from Taxes When Working as a Freelancer
When working as a freelancer, you are required by the IRS to do your own taxes. Hence, you need to keep a record of your earnings for a given period as you will use it in calculating the taxes. For many freelancers filling the taxes is a complex process that they struggle to follow- You can hire the leading tax consultant in your area to help you file your taxes when you are a freelancer. The goal is to rely on the expertise of this accountant to know the tax forms to use when you are self-employed. You will also get help calculating your taxes and paying them on time when you engage this personal CPA expert. Read more now to see the expenses that are tax-deductible when you are a freelancer.
You can deduct the money you spend on office supplies to calculate your net income. The great thing is that you have the option to deduct the office supplies expenses when calculating your taxes. Therefore insist on getting a receipt with every order of office supplies you receive. The goal is to have a record to use when calculating the total office supplies expenses for the year. 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.
The other common expense that you are allowed to be tax deductible when you are a freelancer is meal expenses. When you take a business trip, you will take meals, and you are allowed to deduct these expenses on the taxes you pay. Understand that you can only put reasonable meal expenses. Therefore, you will have problems with the IRS when you deduct inflated meal expenses. It is important to file the meal receipts after the business trip.
Business insurance is the other common expense you can write-off in your taxes when you are 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. The 1099 forms come in various types. You are required to know the ways in which you are supposed to fill out each form. The 1099 form is given to customers who owe you a certain amount of money. The form 1099 is the one that you are required to file your taxes. Hiring a CPA will be the best idea since he will show you how you are supposed to fill out the form 1099.
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