Wednesday, January 25, 2012

It's Tax Time. Do you know where your receipts are?

The H and R Block office has reopened and there are signs all over town announcing deals on tax preparation. That can mean only one thing: it's tax time. The wonderful time of year when we all whimper at the pile of paperwork and forms demanding our immediate attention, realizing we've lost most of our receipts, and we have no idea if we got all of our 1099's and W2's from everyone we worked for. 

This is also an excellent time of year to crack open that expensive bottle of scotch Uncle Jo gave us for Christmas.

When I was writing What You Need to Know to Be a Pro, I decided not to include a chapter about taxes because the tax code changes all the time. There is plenty of info throughout the book about keeping track of expenses in preparation of tax season, but I skipped specific info about filing.  Instead, I research taxes every year and post my findings on this blog.

First, I found this video on ehow. It's more about keeping track of deductions rather than forms, but she explains receipts very well. The presenter in the video has a whole series about Freelance Writing.

Taxes & Being a Freelance Writer —powered by

And here are a few articles I found this morning.  Click the links to read the full article.  Taxes for Freelancers

Did you earn your first income from freelancing last year? If so, you're in for a new adventure: calculating your income and Social Security taxes as a self-employed person.
The basic principle of paying freelance taxes is simple: You add up your income, deduct your expenses, and transfer the net profit or loss to Line 12, "Business income (or loss)," on Form 1040.
Unfortunately, what's simple in principle can be complicated in practice. Here are a few guidelines to help you get started:

Tax Issues for Freelance Writers

Here are some tips and strategies for thinking about your taxes. There are special circumstances that apply to freelance writers and other independent professionals, so I will highlight what you need to know to prepare your taxes.

Being self-employed is quite possibly one of the best tax strategies available today. Unlike being an employee, freelancers are in full control of their financial and tax situation. But independence also comes at a cost. Independent contractors face higher taxes and more record keeping duties than employees.

I really like this next article, written by a freelance writer and business expert.

Blue Inkwell Taxes for the Freelance Writer 

Setting up shop as a freelance is easy enough. Unfortunately, most novices don’t think about the tax implications of what they’re doing until their first tax season rolls around. Then the questions pour out.

What do I have to claim?
How do I deal with 1099s?
What classifies as a deduction?
Am I supposed to pay quarterly taxes?

I'll keep researching the tax code for 2011 and post what I find here. If you have any helpful articles, post the link in comments.

And good luck with the receipt hunt. Check your car. I found lots of Medusa receipts in mine.

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