Every year, professionals and freelancers feel the crunch of Tax Time. Without fail, the Freelancer’s Union tax workshop draws the biggest classes, the most discussion, and the most confusion!
That’s why I brought in local CPA superstar Teresa Herrin to field the nitty gritty tax questions brought up by Seattle’s finest freelancers. Teresa was a fountain of knowledge throughout the night! I highly recommend her to address your tax time woes, connect with her on LinkedIn.
Freelancer’s Union is a nonprofit based out of NYC that provides insurance and educational resources for freelance and independent workers around the country. You can keep up to date on the most current topics and cities provided by Spark here: freelancersunion.org/spark.
This week a diverse group of professionals workshopped the answers to two questions: How to get prepared for tax season and How to minimize what you owe.
Pro tip: Report ALL 1099-MISC income, regardless of whether you’ve received any 1099-MISC forms from your clients or not. The responsibility and impetus is on you to report this income on your taxes!
How to get prepared for tax season: Avoiding stress when it’s time to do your taxes is all about the preparation and staying organized through out the year. Using software to track your expenses and revenue is half the battle. Our class sourced these programs to help put your ducks in a row:
1. Mint (free) – This is a great tool for managing personal expenses and budgets. It’s free but has some shortfalls. However if you’re trying to bootstrap or work on a budget, you can’t beat the functionality for the price.
2. Wave (free+) – Wave is another free option that is an excellent accounting service, tailored for small businesses and working professionals. Wave also has a slew of premium add-ons to streamline invoicing, payroll and more.
3. YNAB ($5/mo) – You Need A Budget is a robust budgeting tool that helps you track your expenses and get on top of your debt. This tool is definitely tailored towards the personal rather than the professional, but is incredibly valuable given its price and functionality. They also offer tons of free education to really help their users get a handle on their money.
4. Freshbooks ($10/mo+) – Freshbooks offers an all-in-one business solution. Their service encompasses everything from expense tracking to online payments and invoicing. Freshbooks provides the most competitive service to Quickbooks and has the added bonus of being a completely cloud based service.
5. QuickBooks ($10/m0+) – Quickbooks is the gold standard of accounting software. If you work with an accountant to get your taxes done, chances are they are using this software. This is definitely the route to go for large organizations and enterprises, with the most beneficial feature being double entry books.
Pro tip: Scan those receipts! The ink tends to fade rather quickly which can be an issue when it comes time to itemize your expenses or furnish proof to an auditor. Make digital copies for ink that lasts forever!
Minimize what you owe: If you’re like me and not good with numbers, and even worse with tax law, you’ll probably want to hire a certified public accountant to help you maximize your return or minimize what you owe. The secret is all in the deductions, and an CPA will know exactly how to get the most out of those pesky receipts you’ve been collecting and scanning all year. Considering time spent and money lost through improper filing, investing in accounting software and CPA will always create a surefire return on investment.