The freelance market is booming due to a number of people losing their jobs due to the Coronavirus pandemic. Self-employed professionals in some circumstances do not need anything but a computer and internet connection. There is a demand for everything from web design, content writing, to data entry. Others with organizational skills can become valuable virtual assistants to executives or owners of companies. Prepping for tax season is nothing short of a nightmare when you are self-employed. The following are tips to help make prepping for business taxes a bit more manageable.
Get a Business Credit Card
Getting a business credit card is essential as this will make it very easy to keep track of your expenses. The tough aspect of this is figuring out what is a business expense and what is a personal expense. Taking a friend out to discuss a business strategy can be seen as a consulting session. You do not want to do too much of this as these expenditures are looked at closely by the IRS. Client dinners can usually be fully expensed without issue, as the entertainment of clients is a staple in many industries. A benefit is the rewards that can be received from these cards for a certain amount of money spent.
Hire an Accounting Firm
There are a number of businesses that might have thousands of transactions that need to be sifted through. Accounting firms are a huge help as they staff only the best and brightest in accounting. The tax breaks that you might not know about and TurboTax doesn’t hint at you taking are common knowledge among these experts. Tax preparation being handled by another entity will save you massive amounts of stress. These experts will also help you in case of an audit which can be triggered by any number of things. With all of the online payments available there are issues lining up income levels with specific accounts. Taxes for individuals working for a company are far easier to file than a person running a small business.
Apps Can Help
Being able to provide all of the receipts for business expenses if you left your credit card at home can be easy with an app. There are apps that take pictures of receipts and even help categorize the expense. This can also be done when paying cash for something that is business-related. Integration with a platform like QuickBooks can make it easy for an accountant or accounting firm to get started on finding tax breaks. The app should be provided to any employee that uses company funds to pay for something. Reimbursing employees for expenses can be complicated and your employees should never go out of pocket for the business.
Running a small business or being self-employed will make it far more complicated to prepare your taxes. You might receive a number of tax forms from various customers/clients that can be difficult to decipher without a professional. Investing in having your taxes prepared is worth it for the stress and the potential savings.