There is obvious flexibility in freelancing business; you schedule your working hours, set acceptable payment rate and work from anywhere you want with other incredible perks. But tax issues and not having a guaranteed paycheck are undeniable challenges of freelancing.
You will have an association with the IRS once you start freelancing. It is important to note that it is not easy to deal with tax, especially if you are not a tax professional. Many tax applications and software still give some issues, hence the need to get a consultant.
Tax consultants on their part make use of a consultant tax calculator to help file your taxes and calculate them accurately. Various tax calculators exist and they work based on pre-set standards of different tax regions. Different countries have their unique tax rates, standards, and currencies, so a consultant tax calculator is designed based on these factors.
Tax consultants make use of these regional tax uniqueness in filing estimating taxes for individuals and organizations. This is done to avoid errors in computations which can have great consequences if detected by the IRS to be inaccurate.
Freelancers, being self-employed individuals, can make use of tax calculators as well to file their taxes quarterly. Quarterly payment prevents a huge tax debt when the tax season is approaching. More so, it should not be annual to avoid having a lot of documents or receipts to process.
Tax filing and remittance should not be a daily or monthly affair since freelancers’ income might not be regular. Using tax calculators will help you escape the consequences of the underpaying of paying your taxes late. Some of the computations needed for the 1040-ES form used for filing taxes for freelancers are:
If you are owing $2000 as indicated on your Schedule SE for freelance tax, you will pay that money when due, but within the tax period, $1000 can be deducted from your Form 1040.
There are a lot of puzzling situations that freelancers face while filing their taxes especially at the heat of the tax season. This can be avoided by using a consultant tax calculator that works on pre-set algorithms. The tax calculator calculates your tax by calculation net earnings from your freelance earnings.
Some of the algorithms integrated into the consultant tax calculator are listed below:
A consultant tax calculator might just be what you need to save you the stress of freelance taxes estimation. The tax calculator varies in standard and pre-set conditions yearly, this is because it has to be set to meet the current standard in the IRS. If a tax calculator worked in 2016, it may be irrelevant in the coming years if some parameters or factors changes about tax estimations.