Yesterday, I finally conquered the black cloud that has been looming over me since the end of January. Tax season is upon us folks and as an independent contractor and freelance lady, this can be a daunting task!!
Last year, was a wild one for my husband and I. My Random Day Job count was pretty high. I was living back in Atlanta, while my husband was first looking for a job and then traveling all over the country to complete training courses for his new job. The courses were required before we could move and he could start the new job. It was definitely interesting, but that's the military I suppose (Note: My husband is a Fighter Pilot in the Air Force Reserves).
Anyway, back in Atlanta, I was picking up every job possible! Here is the list of my jobs from 2010:
K-la - Sales Associate
Nicole Miller - Sales Associate
Keller Williams - Realtor and Realtor Assistant
People Store - Talent Agent in GA
Millie Lewis - Talent Agent in SC
I also worked some additional contract jobs for several companies including Turner Broadcasting, Creative Presence Partners, Redline Staffing, IFM International, Soteria Productions and Circus Chasers.
With so many W-2's, 1099's and Miscellaneous Income, taxes take a bit more effort.
As an Independent Contractor, here's what you need to know about taxes:
Depending on the job, you will have a W-2 or 1099. Since, 1099 jobs do not deduct federal taxes, I suggest paying taxes quarterly (there was a year that I owed 8K to the government because I did not pay quarterly, trust me that hurt)! Personally, every time I get a check from 1099 work, I set aside 30% and when quarterly payment time approaches, I simply send a check to the government for the total amount I've set aside. This is a discipline that has served me very well and I highly recommend it!
You will only receive a 1099 or W-2 from companies that paid you $600 or more. There were several jobs that I worked in 2010 where I received less than this amount, but I still report the paycheck. I keep copies of the checks and list them under "Miscellaneous Income."
Also, it's VERY important to save all of your receipts. I label each receipt used for business whether food, office supplies, clothing for jobs, dry cleaning, postage, parking, tolls etc. and drop them in a box. During tax time, I can easily organize the receipts and know exactly what I have spent on each and every job.
A mileage log is also very important. My calendar is always with me, so that's where I keep my mileage log. Write down the date, job and how far you traveled. Mileage is a really good tax write off and you don't want to miss out.
Other expenses including cell phone, fax machine/scanner, office space in your home, gifts to clients, association, membership or website fees etc. can all be tax write offs. If you spend ANY money that relates to your business, make sure to save the receipt!
My husband and I use Turbo Tax Home Business and it's a fantastic program. It walks you through every step, so it's very user friendly. Plus, they will double check and ask about every tax write off, so you won't miss a thing!
How is your tax filing process coming along?