Are you a freelancer who is filing taxes for the first time? Or have you filed taxes before, but wish the process could be made quicker and more efficient? In this article, we tell you all you need to know about filing taxes as a freelance professional.
Being a freelancer is a lot of fun – you are your own boss and work from your own home. But remember, while you are spared of the 9-to-5 grind, that does not excuse you from having to file your tax returns, regardless of how much you make.
So are you ready to file taxes? Good! Here’s what you should know.
First, who is subject to paying taxes in the United States? Well, any income earned within the US is subject to taxation. There is no escaping that.
In the US, we have a pay as you go tax system, which means the IRS expects you to pay taxes throughout the year. So employees get their taxes deducted from their monthly paychecks.
What if you are a self-employed professional or a freelancer? In that case, you cannot have your taxes withheld at source. You should pay the estimated taxes yourself.
There is a schedule that you should stick to while paying the estimate taxes.
If you are not sure about how to calculate your estimated taxes, you may want to sign up for Drake Tax Software Hosting or ATX Tax Software Hosting plans. You could also subscribe to any other tax software of your choice which do all the math for you, so that you make the payments within a set deadline.
Now, with our cloud-based tax preparation software programs, you can file your taxes online. The IRS allows you to file your taxes electronically through the Electronic Federal Tax Payment System (EFTPS). This is a great way of paying your estimated taxes quickly and on time.
Another option is to send your taxes by snail mail to the IRS to a specific address, which depends on which state you live in. The payments on the check sent by snail mail should be postmarked, so that you can avoid paying penalties on them.
Of course, we don’t need to tell you that the best way to pay your taxes is with our cloud hosted tax preparation systems, whether it is Drake Tax Software on the Cloud or ATX Tax Software on the Cloud or any other software of your choice.
This way, you don’t need to worry about doing any of the calculations yourself – just feed in the data, and the software does everything for you. Do contact us for a free trial on any of these cloud-based applications.