As soon as tax season is over, it’s common to want to forget about them until the next season rolls around. But as a freelancer, it’s important to pay attention to your taxes throughout the year. To avoid the stresses that come leading up to April 15th, there is plenty you can do year round to make your life easier. But instead of just listing them out for you, I thought I’d make a simple calendar you can refer to each month for a little guidance.
Pay Your Taxes Quarterly
The biggest issue us freelancers face is having to owe a huge sum by the end of the year. If you work for an employer, your taxes are taken out of your paycheck automatically, so you typically don’t owe anything come April 15th. It’s definitely a different story for us! The most useful thing I started doing is paying my taxes quarterly. It really helped take the stress off! To calculate how much to pay each quarter, start by estimating your income for that year. If you think you’ll grow significantly from the year before, take that into account.
In order to calculate that amount accurately, and make sure you have the correct forms to submit with those payments, I like to use TurboTax SmartLook so I can talk to an expert. TurboTax Self-Employed gives you priority access to credential tax advisors. You can connect live via one-way video to CPAs or Enrolled Agents and get answers immediately at no additional cost. You can schedule an appointment if that works better for you! It’s definitely my favorite tool that TurboTax Self-Employed has to offer!
Put Aside Money Each Month for Taxes
The other dates you’ll notice on the calendar is the last day of each month. While paying your taxes quarterly is great advice, it can still be difficult to scrape up that amount of money every three months. This year I’ve decided to review my income on a monthly basis and set aside a specific amount to go towards my quarterly tax payments.
To keep track of my revenue, I use Quickbooks Self-Employed and I don’t know what I’d do without it! I link up my bank accounts, credit cards, and more to my Quickbooks Self-Employed account, allowing me to keep track of all of my payments. I also create invoices not just for my clients, but for myself! At the end of each month, it’s so easy to log in and see exactly what I earned that month and even subtract my expenses as well.
Prep for Annual Taxes
I’ve also included a few arbitrary dates towards the beginning of the year to help you prep for your annual taxes. I always suggest getting on top of your vendors for 1099s as early as possible. Technically, they are required to submit their 1099 forms by January 31, so emailing them mid-January is a good idea. Ideally, they’ll just send you your 1099 form, but every once in a while there are vendors who don’t. So rather than waiting on them, take the initiative! I added a couple more dates for you to start calculating your expenses and prepping the rest of your docs.
Thank you Quickbooks Self-Employed for sponsoring this post!