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How Should A Freelancer Prepare for Tax Season?

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Question: How Should A Freelancer Prepare for Tax Season?

Congratulations! If you're worrying about taxes, that means somewhere along the way someone has paid you for your writing. You've just acheived what many people only dream of.

Up to tax season, you should have been keeping careful track of your cash inflow and outflow. We've explored some easy ways to manage your freelance expenses and payments with About Guide Darrell Zahorsky. So, now it's time to put those records to use.

Answer:

Fill out W-9s. Some of your employers will have asked you to fill out a Form W-9 prior to completing your writing project and getting paid.

Collect Form 1099s. It is likely that, come January, you will begin to see Form 1099s arriving in the mail from your contractees. An employer is required to file this form with the Federal government and provide you a copy if they paid you more than $600 in fees over the course of a year. Collect all these forms into one file.

Check Your Records. Compare the 1099s you received with the excellent records that you've been keeping of all your payments. If you feel that an employer should have sent you a 1099, but didn't, you should check with them.

Figure Out Your Expenses. Using your excellent records, whether they be Excel sheets, accounting software, or old-fashioned line-item notebooks, come up with a total amount of expenses incurred in the handling of your business. This includes website commisions, membership fees, service fees, and research expenses. These items, called "deductions" can get a little complicated, so be sure to read this advice on deductions from About's tax professionals.

Trust a Professional You have now thoroughly accounted for the cash flow of your writing expenses and payments, and you are now ready to give this information to your tax professional. Whew!

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