You might feel like your heart is still pounding from getting your 2009 tax return completed on time, but the truth is it's never too early to start thinking about your 2010 tax return, especially if you are a freelancer or independent contractor.
Here are some freelance and self-employment tax tips you can implement today to make your 2010 taxes easier:
1. If you need an accountant, find one now. Didn't like your last accountant? Decided you're done going it on your own? Don't wait until next year to choose your accountant. Start looking now, and follow these tips from BiDaWiz.com.
2. Figure out your estimated taxes and pay them. You may need to consult this form to figure the amount. If this is your first year freelancing, and you aren't already set up with the IRS to pay estimated quarterly taxes, simply figure the amount and set it aside at regular intervals this year, so you are ready to pay what you owe in April 2011.
3. Save your receipts. Save your receipts. If any expense is evenly slightly work-related, you need that receipt. A new pen to write down notes while talking to your buyer? Work-related expense. Coffee while working at Starbucks? That's a work-related expense too. (Though it is figured in the category of meals at tax time, which reminds me, check out June Walker's advice on categories!) Just make sure the receipts are all in a location you can control and keep organized.
4. Get a business account at your bank. Take this Salon.com writer's advice and open a separate bank account for your freelance work, then pay for work-related expenses and pay yourself from this account. While it may seem like overkill, it helps in the long run, trust me.
5. Keep track of businesses and buyers that will owe you a 1099 at the end of the year. They might forget. They might cheat. You never know. It is, however, your responsibility to get that 1099 at the end of 2010, so stay on top this matter.
What about you? Anything you wish you had started doing earlier in 2009 to make your last tax season go smoother?
More on taxes from the oDesk Blog:
- 5 Things Every Freelancer Should Know About Net Profit and Loss Reports
- Self-Employed Tax Tips for Freelancers