Key Things to Know About the Freelancer vs. Employee Taxation
Being a freelancer gives you the control to decide when to work and the clients to choose. Before you become a freelancer, it is wise you learn more about the taxes you will be paying. Understand that the employees’ taxes are different from the self-employed people. To know taxation for the freelancers works it is smart you search for the best website to guide you. The goal is to ensure that you adhere to the taxation laws set by the IRS for self-employed people. Continue reading this blog now to see the key things to know about the freelancer vs. employee taxation.
When you are employed, your employer will be handling the taxation on your behalf. You will therefore receive a salary that is less various deductions made by the employer. The employer will withhold your income tax for the month and make other voluntary deductions. The taxes you pay when you are employed will be determined by how much money you earn and the State you work. Also, other factors such as the number of dependents will influence the taxes you pay. To know more about the taxation forms to use when you are employed, you need to find the best site to use. You should also get more information on your State taxation.
You are liable for handling all matters relating to the taxes when you are a freelancer. The money you receive from clients does not have any withholding taxes. To ease calculating the taxes to pay as a freelancer, you need to keep track of all your earning for a given period. You may have a difficult time calculating the taxes when you are new in the freelancing industry. You need to discover more on things that you can use to calculate the taxes as a freelancer. You may need to hire an accountant to help you calculate the taxes when you are a freelancer. You also need to weigh the alternative of getting a simple to use taxation software to use when you are new in the freelancing industry. It is smart you examine these two alternatives, see the cost of each to identify the one to employ. You also need to get more information on tax write-offs you can get when you are a freelancer.
Handling the taxes as a freelancer does not have to be hard when you keep a good record of your earnings. Consider using spreadsheets to input your income after every work, record the money you earn and the expenses you incur.