For freelance workers, such as writers or graphic designers, work comes from clients who offer piecework or contracts. If you’re freelancing, you may wonder how much do I earn before I pay tax to the government? It’s important to examine the rules and laws of the IRS when you are self-employed. In general, and there are variables here, you will need to earn more than 9,450 dollars in order to pay taxes. There are also some clever ways you can make the most of your tax return deductions if you freelance.
Keeping receipts and careful records will help you pay less tax when you file your return. This documentation can help you avoid paying more money on April 15th. For example, if a client stiffed you and didn’t pay their bills, you can potentially write off the loss on your tax return. These kinds of debts will need to be proven with a paper trail that the IRS will recognize. Including invoice photocopies and other proof will help you get these valuable and deserved deductions.
Do you wine and dine potential clients to drum up business during the year? If you do, you may be eligible to write off these business-related costs on your taxes. From Peppermint Mochas at the designer coffee shop, to meals where new projects are discussed, you can save on your taxes by taking advantage of write-offs for work expenses. Learning more about your status as a freelancer will help you get the most out of the hard work you do to earn a living. Don’t pay more taxes than you have to – do some research and claim every single deduction you can!