Being your boss is fantastic, the fun and flexibility that comes with working for yourself are not comparable to what you enjoy from a regular 9 to 5 pm job even though you’d that has a steady monthly income. An independent contractor in New York City is regarded as a freelancer irrespective of the service that is being offered.
As a freelancer or consultant working in NYC, it is expected that you familiarize yourself with freelancer laws guiding freelance taxes NYC computation and payment. Studies have shown that freelancing is becoming popular among the millennia as companies now cut costs and achieve more with remote workers and freelancers.
Hence, the need to understand self –employment tax and other tax responsibilities in NYC to fully upgrade your freelancing business without fear of being trailed by organizations in charge of tax.
In decades to come, it is estimated that freelancers would make up to 70% of the US workforce meaning you are on the right part as a freelancer. Even if you have a regular full-time job that pays very well, setting up another source of income through freelancing is also not a bad idea.
However, the downside of being a freelancer or working as a consultant is the payment of freelance taxes in NYC, and the headaches associated with it.
There is no doubt payment of tax by freelancers is very complicated, and below are significant and important things to know about freelance tax NYC computation.
Medicare insurance has raised a lot of eyebrows on how freelancers could access the insurance scheme and benefit from it. However, it has been established that consultants, freelancers, and self-employed individuals are also eligible to partake in the deductions for dental and medical insurance. Meanwhile, out of the 15.4% meant for the tax scheme, some percentage is allocated for the health insurance, which can also cover your dependents - a must know for your freelance taxes in NYC.
Edging out and having your freelance taxes sorted could be a pain in the ass if not correctly approached, but here is a safe method to help you out. The idea is to have you file your earning from your freelancing work and also break down all expenses incurred in landing any job done.
As a freelancer, you at liberty to deduct money spent to buy software, internet subscription, phone calls, material or other digital assets. Proper accountability will not only help you compute your tax accurately but also serve as a yardstick for the estimation of your freelance tax NYC in the subsequent quarter or year. Additionally, make available all receipts of transactions between you and the contractor, as evidence to the IRS.
With the extent technology has gotten to, budgeting should be a must for you, and that could be achieved by installing reliable apps from the internet. Tracking your expenses and ensuring you have reasonably good approximations of taxes can be achieved with software and tax calculators. One of the ways to track income and pay your tax is through the use of bank apps that automatically deducts and save a certain percentage of your income as tax.
Unless you have enough time to scan through the pages of the IRS tax code, it would be of great benefit if you could talk to a tax expert. Although, when you have either one or two-stream of freelance income, you might be able to audit yourself. However, multiple freelance incomes might seem complicated and unachievable ordinarily by you.
Another mistake you might be making as a freelancer is trying to sort out yourself when your taxes are becoming complex due to multiple income streams. Information required to compute your tax is at your fingertips.
Let Bonsai’s template be your guide as you upgrade your freelance business.