Being a freelancer gives you the control to decide when to work and the clients to choose. Before you become a freelancer, it is wise you learn more about the taxes you will be paying. The reason is that freelancers taxing works different from that of employees. To know taxation for the freelancers works it is smart you search for the best website to guide you. The goal is to ensure that you adhere to the taxation laws set by the IRS for self-employed people. Below are the crucial considerations for the employees vs. freelancer taxation.
When you are employed, your employer will be handling the taxation on your behalf. You will therefore receive a salary that is less various deductions made by the employer. Therefore, the employer is the one who will make your tax payments and direct other voluntary deductions. Your income bracket and where you live will impact on the taxation rate. It is also wise you learn more about things that can help you pay fewer taxes. It is, therefore, wise you find a genuine website that will assist you to know the various tax forms to use when you are an employee. You should also get more information on your State taxation.
If you decide to become a freelancer, you need to know that you will be managing all things relating to the taxes you pay. The money you receive from clients does not have any withholding taxes. It is therefore up to you to keep a good record of all the incomes for a given period to decide the total amount to pay in taxes. You may have a difficult time calculating the taxes when you are new in the freelancing industry. You need to discover more on things that you can use to calculate the taxes as a freelancer. Some freelancers opts to hire accountants to help them when calculating the taxes and ensure they pay them on time. You also need to weigh the alternative of getting a simple to use taxation software to use when you are new in the freelancing industry. You should therefore compare these two options to determine the one to use. You can deduct certain expenses from your income as a freelancer reducing the amount you pay in taxes.
Handling the taxes as a freelancer does not have to be hard when you keep a good record of your earnings. You may opt to use a spreadsheet to keep track of the money you have earned in the years.