Taxing Freelance Income?

If anyone can help, it is greatly appreciated:

I am just wondering what do I need to do to make sure I get the proper taxes accounted for from my current freelance gig. I am making quite a bit of money doing this (Between $300-500 a week) so I don't want to have things screwed up come tax time.

Thanks!

 

Your paper should send you a MISC 1099 at the end of the year. It's similar to a W-2, but instead is giving to people like insurance agents, and others who are technically self-employed, but don't own a business.

Taxes suck with a 1099 simply because you have federal and state taxes plus the other add-ons like social security, etc.

 

echoing that ... you should have been asked to submit a signed W-9 very early in the process ... even though the onus is on them to supply the IRS with your earnings ... it's up to you to account for it on your taxes ... so keep track of every penny and include it on your sched SE and sked C ... keep track of your expenses (mileage, et al) ....

 

a good accountant can help down the road.

 

You might also want to think about filing quarterlies, so you don't get hit with a huge tax bill in April.
And you have to think about deductions: office expense? cell phone? computer?
You can possibly deduct a portion of your mortgage/rent, utilities, even cable TV depending on what you're covering.

 

Be careful on this though. Write off only the percentage of usage that you can prove. Everyone likes to write their home off as an office so the IRS checks those things thoroughly.

And you can always just put some money away each month instead of filing quarterlies. I realized with the bracket I am in, I get charged less in taxes than on my normal paychecks. I honestly have no idea why this is.

 

Whatever you do, make sure you claim every last dollar.

There are people to screw with. The IRS, however, do not fall in that category.

 

Put aside X amount of every check in a savings account (preferably one you can't access at an ATM and treat as a revolving loan). In the gravy-train days, I used to put away one-third of every check. Now I'm more likely to do one-quarter, but I'm also making sure I write off every little thing that I can.

 

One third is a good place to start, and I wouldn't take tax advice from us, as experienced as many of us are. Take this question to an accountant.