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Tax Advice For Freelance Workers,
Independent Contractors, Self-Employed People, Sole Proprietors
If you've left your traditional salaried job to be a freelance consultant, you probably have lots of tax-related questions. Here are the ones I hear most often:
(Here is other information for new businesses.)
Records You Need to Keep for Taxes You need to keep your bank & credit card statements, and other business records for at least 5 years. Here is more information about document retention. You also need to keep track of the business-related miles you drive your car. In 2020, the standard tax deduction is 57.5 cents per mile, which can add up to a large tax deduction. You may be able to claim more based on your actual car expenses. You can keep your mileage records in whatever format you choose: on your phone, on your desk top, in a little calendar book in the car. The important thing is to keep it up as the year goes along. The IRS regulations state that your car mileage records must be kept "contemporaneously" but doesn't define that term.
Tax-Deductible Expenses
How Do I Pay My Taxes? The income tax and the self-employment tax are paid together. More information on calculating and paying your quarterly estimated tax payments. If you would like to discuss your personal situation with an experienced CPA tax accountant, please call or email me.
Bess Kane, CPA |