Published : 3 years ago, on 04/08/2021

Did you recently start a freelance job that allows you to work from home and be in charge of your own schedule? Are you unsure of how this affects the taxes that you have to pay?

If so, then it’s important for you to know the best ways to pay taxes while still keeping a reliable amount of money in your pocket. While the IRS requires that you pay taxes even if you don’t work for another person or company, this doesn’t mean that you’ll have a harder time in this area than regular employees.

All you need to do is keep an eye on any potential expenses required for your job, as well as document them for when you need to pay taxes. Without our knowledge of finances, you’ll be able to get paid back for what you spend on your job while enjoying the flexibility and freedom of remote work.

Follow this guide for freelancers so that you know how to get more money back on your taxes.

Calculate Deductible Business Expenses

Despite not having to go to an office for your job, you’ll still have to spend money in order to stay on track with assignments and do as much work as possible for your best return. That is why one of our tax tips for freelancers is to deduct certain expenses from your taxable income.

These expenses come in different forms, such as advertising, physical supplies, software, insurance, and furniture you need to do your job. Whatever you use, even if it’s personal, to do your work can be included so that you can reduce your tax liability.

You can also include the use of your car as a deductible expense, such as how much you spend on gas, how much you have to travel to certain places to do work. We also recommend considering any money you have to spend on anyone who lives with you, especially if it relates to your job.

Claim Home Office Tax Deductions

One of the benefits of working from home is not having to wake up early and get stuck in traffic in order to get to an office out of town. Freelancers can use their home as their station of work, whether they want to work on comfortable couches and beds or use a specific room as your office.

When it comes to how to get money back on taxes, you can focus on home office tax deductions so that you can save money on your returns. Whatever part of your home that you use to do work must be used specifically for your business on a regular basis, and your home must be the principal place for your business, according to the Internal Revenue Service.

The way you use your home must also be convenient for employers, such as if your company doesn’t have a local office or enough space for you to do your job. You can pick any part of your home for this purpose, from the garage to a bedroom that you can redesign as an actual office.

Organize Paperwork

Another move that’s important for how to get the most money back on taxes is keeping a collection of all of the paperwork needed to get the most out of your returns. This includes the forms that you need to sign for freelance work, as well as records of the money you spend on your work.

Important forms include the 1099-MISC in order to collect the annual income, as well as the 1040-ES for calculating estimated taxes to pay each quarter of the year. With these documents, you will be able to figure out what you will have to pay and figure out what you need to do to get a greater return.

We recommend making a list of all of the money you spend on expenses, such as office supplies, gas, software, advertising, and anything you’ve done to help co-workers. It’s best to keep physical and digital records of these expenses so that you always have an extra copy.

Have The Right Insurance

As much as what you do on the job is important for what you can save on your taxes, you also need to factor in your coverage. The insurance that you will have for your home office won’t be the same as the insurance you would have working a regular nine-to-five job.

One of the types of coverage that you’ll need to consider is commercial auto insurance, which comes in handy for those that need their car for work and want to be protected against damage or liabilities to their vehicles. When it comes to potential damage to your office at home, property insurance is the way to go.

You’ll also need general liability insurance in case someone tries to sue you and you need money for legal fees and court expenses. Those with a family should consider how many people live with them if they want to avoid as many costs as possible and be considered for certain insurance.

Talk To An Accountant

If you’re new to the freelance world, then it may help to talk to an expert in the field so that you make as little mistakes as possible. One person that you can speak to is an accountant, who can give you all of the advice you need on how to get more money back on your taxes.

While this may add to your list of expenses, it will save you money, in the long run, to find out all of the benefits that you can obtain once tax season arrives. An accountant can help you discover potential deductions that you wouldn’t have discovered on your own.

Consider if you plan on moving up in your company or want to find a better freelance job so that your accountant can figure out what you need to add to your deductible list in the future. No matter where you are in your life, freelancing gives you more freedom for work.

Our Take On How To Get More Money Back On Your Taxes

When it comes to how to get more money back on your taxes, all you need to do is keep a record of the right information. This includes receipts of your spendings, income, and documents you need to sign for freelance work.

With these tips, you will be able to enjoy a reliable living as a freelancer. If you need to produce your own paystub as a printed document, you may do so by using the pay stub maker online.

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