There is a common misconception about freelancers that they should file their taxes in the same way as their regular employees. Whether you are working with one client or taking on many projects daily, the IRS will treat you as a self-employed individual, so you need to pay the income tax as one amount.
Robert Nico Martinelli on how freelancers pay their taxes
Freelancers cover the whole 15.3% FICA tax rate, and if you are a freelancer, you can reduce the total dues with tax deductions. The IRS permits you to write off diverse business expenses, and when you have knowledge about them, you are to save a lot of money with success.
Robert Nico Martinelli is an expert in the field of tax planning, and he helps businesses and professionals with their goals to save money. According to him, the following are some of the business expenses that you can write off if you are a freelancer when you file taxes-
- Freelancers – Self-employed freelancers can write off many employees’ equivalent payments as tax from their own tax.
- Start-up costs – You can deduct up to $5,000 for start-up costs unless the overheads surge up to $50,000.
- Health insurance – Here, you can deduct the premiums of health insurance on your own, your spouse, and your dependents’ policies from the taxes.
- Your retirement contribution – He recommends freelancers make their retirement contributions, especially those self-employed professionals planning to freelance full-time.
- Internet connectivity – Freelancers need the Internet, and they cannot survive without it. You can write off the fees as your business expenses.
- Office supplies – Your office supplies can also be deducted from the taxes, and they include staples, paper, folders and pens that can save you a lot of money every financial year.
- Business trips – The IRS lets allows you to deduct your gas, airfare, taxi fare and about 50% of the total expenses on meals for business trips.
- Costs of transportation- If your freelancing business needs a vehicle, you can also deduct this portion.
- Advertisements – You can reduce a part of the budget that you have set aside for advertisement
These are some of the tax deductions you should know when you file your taxes. In this way, you can save a lot of money in the process.
Consult a good specialist for tax planning
It is true that you might have to give extra money to your accountant. However, the money you save from filing the taxes for your self-employment business is a lot. If you are a freelancer and not sure about these tax deductions that are applicable to you, you should seek help from a specialist.
According to Robert Nico Martinelli, the money you save for the above actually compensates for the fee you should give to the professional. The professional you choose should be experienced, skilled and qualified with proven track records.