3 Quick & Dirty Tax Tips For The Self-Employed

2013 taxes freelancer tips

As soon as the New Year’s glitter has settled most people start thinking about Spring. Unless you’re an entrepreneur. Then you start thinking about taxes. Even the most experienced self-employed professionals gets a little nervous when tax time rolls around. There are so many moving parts, so many things to remember, so many receipts to lose, that it’s hard not to feel anxious about how everything will turn out.

This year, we’re not going to regurgitate the same old tax time tips. Most of them are only helpful BEFORE it’s time to file anyway. Instead, let’s look at some of the most important things to keep in mind as you get ready to file, quick and dirty style.

3 Quick & Dirty Tax Tips For The Self-Employed

1. W9 Extravaganza – You should always exchange W9 forms with a client or subcontractor before the work starts, but if you didn’t, DO IT NOW. Especially if any of your contact information has changed since you first started working together. Waiting just delays the ability of both parties to file their taxes. Doing this early also means plenty of time to correct errors or disputes if any arise.

2. Brace Yourself – It’s rare for the self-employed person to get a refund. In fact, most of us just want to break even. However, if you failed to make a quarterly estimated payment (or two), now’s the time to prepare for a big bill. And, if you haven’t been stowing money in a separate business savings account, start thinking about where that cash is going to come from. Taxes aren’t due until April, so you’ve got some time to move things around. Or start your Ramen diet.

3. Delegate – Yes, you’re smart enough to do your own taxes, especially with all of the “home business edition” software packages out there. But don’t. Even those programs aren’t fool proof. They’re only as good as the prompts, and if they don’t ask you the right questions, you’ll leave deductions on the table. When you work with a real person, you can ask real questions in real time, allowing them to get a better picture of your life and business, so they can choose the right deductions. Besides, hiring a tax prep professoinal is a deductible business expense for next year.

If you’ve found an amazing, independent tax prep professional, and they’re looking for new work, please share contact info in the comments. Freelancers love to hire freelancers!

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Image: 401(K)2013

Infographic via Visual Loop

Top 5 Spring Cleaning Tasks For Busy Entrepreneurs

messy desk

You wouldn’t know it with all that white stuff lying on the ground, but Spring has sprung in Colorado. Though most people are busy organizing closets or washing windows, Spring cleaning doesn’t only happen around the house.

The changing of the season also indicates the start of a new fiscal year, a good time to take stock of your last year of business, and set yourself up for success over the next 12 months. As freelancers and solopreneurs, we thrive on flying by the seat of our pants, but sometimes that makes for a disorganized style of business–and disorganization always costs time and money.

If you’ve been feeling a little chaotic and claustrophobic lately, here are five spring cleanup tasks that will bring order your desk, work flow, and professional life.

Sort and Delete

How many unused files still live on your hard drive? A final edit, software you tested, or CSS files from an old client? Yes, keeping them for a month after the project completes is normal. Keeping them a year after is not. It’s just digital clutter making it harder for you to access active files (and probably slowing down your machine, too). Take a couple of hours to open these archives and send what you don’t need to the recycling bin.

Pro tip! Store client work in the cloud or sign up for an organizational tool like Doo to keep things better organized in the future.

Update your Portfolio

Was 2012 a busy year? Proud of the work you’ve produced? Then it’s time to update your profile. Remember, portfolios are meant to be beautiful, exciting, and show your diversity as a professional. No matter what type of client you’re pitching, you want to be sure they’ll see the talent they’re looking for among examples of past work. Pro tip! Always make sure to ask client permission to include their project in a portfolio (or build that language into the contract).

Unsubscribe to Junk Mail

Throughout the year we sign up for lots of newsletters and email alerts that we don’t really need. Months later we find ourselves slogging through this same junk mail every morning. Reduce the clutter in your inbox by unsubscribing to any automatic emails that you don’t read or utilize on the regular.

Pro tip! Sometimes purchases or registrations for useful services come with unwanted email. Be sure to uncheck the newseltter/special offer box next time you’re signing up for something online.

Financial Facelift

For most entrepreneurs, tax time is a gut check. The IRS tells you in no uncertain terms whether you’re making and setting aside enough of your income. Take a few extra minute with your accountant or tax prep professional to ask questions about what you could do differently in the coming year. Maybe you need to up your savings. Or maybe you just need to up your rates. Thing about where you want to be financially next spring, and set the goals now that will help you get there.

Pro tip! Think about making quarterly tax payments this year if you haven’t been doing so already. Your tax professional can help you estimate how much these should be.

Reinvest in You

You spend thousands of hours doing what’s right for your clients, but when’s the last time you did something nice for your professional self? It’s very important for entrepreneurs to keep learning, experimenting, and discovering. Continually challenging yourself with new ideas and tools keeps your mind sharp, and that’s why clients keep coming back! Sign up for a class, attend a workshop, or get a change of scenery. New environments and people are the chisel’s that can help reveal new opportunities and talents hidden within your community.

Pro tip! Sign up for Cohere’s free day pass and come see what it’s like to work in a great space full of great people striving to be the best at what they do.

Image via MarketMeSuite/Flickr

Income Tax Season Survival Guide for Freelancers

income tax

There are only 47 days until the federal income tax deadline. 

If a pile of 1099’s (rather than a single W2) landed on your doorstep last month, you might be a freelancer. Tax season is a stressful time for any working American, but for freelancers and business owners, it breeds a particular brand of terror.There are lots of different rules when you work for yourself, including lots of potential deduction and penalties.

If, like many of us, you’ve been trying to ignore the shoe box full of crumpled receipts you call an expense file, the idea of getting it all organized in the next month might seem impossible. But it’s not. Here are the three biggest things you need to know about filing income taxes:

1. Get an early start (you kind of already miffed this, so get started today).
2. There are tons of deductions no one knows about.
3. Hiring a professional who knows where to find them is totally worth the expense.

Now here are some stellar resources to help you achieve the above, retain your sanity, and pay as little as possible.

The Finance of Freelancing: Tax Tips for Confused Contractors: includes lots of hints about what forms you’ll need and deductions you might not have realized.

Tips, Tricks, and Tools from the Freelancers’ Union: a no-nonsense guide to what you need to know and do, including a helpful glossary of terms common to entrepreneurs and no one else.

4 Ways to Lower Your Tax Load: It might be too late to implement some of these for 2012 filings, but it’s never too soon to think about next year.

How to Choose a Tax Preparer: Straight from the IRS’ mouth. Also, feel free to ask one or more of your fellow coworkers for a recommendation  Many of Cohere’s members have been freelancing for years, and can tell you who’s a lifesaver and who to avoid.

Image via Images_of_Money/Flickr

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