Common Expenses that You Can Deduct from Taxes When Working as a Freelancer
The IRS considers freelancers to be self-employed and requires them to do their own taxes. As a freelancer, you must keep accurate records of the payments you get from clients as you will use the record to determine taxes to pay. You may challenge knowing all the forms to use for filing your taxes as a freelancer. 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 also get help calculating your taxes and paying them on time when you engage this personal CPA expert. Continue reading this blog to see the common expenses that you can deduct from taxes when working as 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. Hence, make it a habit to file all the receipts you sell from the office supplies vendors. The goal is to have a record to use when calculating the total office supplies expenses for the year. Also, you can present the receipts to the IRS in case of a dispute about your tax returns.
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. It is wise to know that meal expenses cannot exceed a given limit. Therefore, you cannot take advantage of this tax write off to take super expensive meals when on a business trip. It is important to file the meal receipts after the business trip.
Freelancers are also allowed by the IRS to deduct the business insurance expenses from their incomes when calculating the taxes. You may have an office which you have insured against fire when working as a freelancer. Hence, you need to keep a record of all the premiums you pay to deduct them from your income.
When you have understood about the common expenses to write-off in your taxes, it is important you now try out the form 1099. The 1099 forms come in various types. 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.