The Ultimate Guide To Filing Taxes For Freelancers

Freelancers and gig workers enjoy flexibility, but tax season can be a challenge. Our ultimate guide simplifies the process, helping you understand your obligations and maximize your deductions.

Understanding Your Tax Obligations

Unlike traditional employees, freelancers receive 1099 forms instead of W-2s. This means you’re responsible for self-employment taxes and estimated quarterly payments. Don’t overlook these to avoid penalties.

Keeping Track of Income and Expenses

Accurate record-keeping is essential. Use apps and tools to track your income and categorize expenses throughout the year. This will make filing easier and ensure you claim all eligible deductions.

Essential Deductions for Freelancers

1. Home Office: Deduct a portion of your rent or mortgage if you use part of your home for work.
2. Supplies and Software: Anything you use for your business can be deducted.
3. Travel: Deduct business-related travel expenses, including mileage.

Self-Employment Tax

Freelancers must pay both the employer and employee portions of Social Security and Medicare taxes. This is calculated at 15.3% of your net earnings. Make quarterly payments to avoid underpayment penalties.

Health Insurance Deductions

You can deduct premiums if you pay for your health insurance out-of-pocket. This includes coverage for yourself, your spouse, and your dependents.

Retirement Savings for Freelancers

Consider a SEP IRA or Solo 401(k) to save for retirement. These accounts have higher contribution limits than traditional IRAs and offer significant tax advantages.

Dealing with IRS Audits

Freelancers are more likely to be audited, so keep meticulous records. If you’re audited, provide all requested documents promptly and accurately.

Simplify your tax season by partnering with Marinba Taxes LLC who understands the unique challenges freelancers face. Contact us today to learn more!