If you are new to freelancing - or even a seasoned freelancer - taxes can be quite overwhelming. You don’t know exactly how much money you owe, and there’s a risk involved in doing something wrong, which could lead to a fine. And let’s be honest - you probably outsourced some things in your business where you don’t feel confident enough to do them yourselves - so doing that for all things taxes can be the right move. So you can focus on other needle movers in your business. In addition, having a finance tool like Lunafi throughout the year helps make sure you are very prepared to hand everything over to the CPA around tax season.
Why working with a CPA might make sense for you
Some tax scenarios can be very complex, and no matter how much of a google rabbit hole you go into, you could still be making a mistake. Hence working with a professional is the right move in this case. CPAs also help you maximize your tax write-offs and guide you when it comes to retirement planning and how your contributions affect your taxes. Statistically, when you work with a CPA, your $ return might be higher than when you file taxes on your own. Another reason why working with a CPA might make sense is, especially if you are new to freelancing, your tax questions might be piling up, and you just need answers.
What does your CPA need to know about your biz?
When choosing the right CPA for your business, make sure your CPA understands the basics of your business and how you generate revenue. CPAs work with a wide variety of freelancers but making sure they understand how you generate revenue and what your expenses mean is key.
Why working with a CPA could save you $
When working with a CPA, the CPA will pay any interest or penalties for accounting errors that occurred while they filed taxes for you. So if you ever underpaid taxes - even though you worked with a professional - you aren’t liable for those penalties and interest costs.
Pricing structures of working with a CPA
The pricing structures of working with a CPA can range from an hourly rate to just the filing fees for taxes in general. If you have many tax questions, your CPA might answer those for you and charge you their hourly rate. For the end of the year tax filings, your CPA will most likely charge market rates that depend on the document you have to file and the amount of time your CPA will take to file those. Rates will also vary depending on the state(s) you are filing in.
Ultimately, the decision if you want to work with a CPA depends on your budget and how versed you are when it comes to taxes. If this is your first tax season being a freelancer, you might want to pay someone to help you out so you can take it on the next year yourself.
The main key to staying organized is not starting a few weeks before tax season but making sure your business finances are well taken care of all year round. Lunafi makes it easy to track your income and expenses and how much taxes you owe.
Learn about the importance of the 1099 form for freelancers and independent contractors who work with businesses on a regular basis. This form is crucial for tax reporting and must not be ignored. The article takes a closer look at the reporting requirements for 1099 forms
Are you a freelancer struggling to manage your time, budget, and taxes? Avoiding common freelance mistakes can be the key to success.
As a freelancer, managing your finances can be a challenging task, especially when it comes to accurate accounting. Accurate accounting is crucial for the success of your business, as it helps you make informed decisions, manage your finances effectively, and stay compliant with legal regulations. In this blog post, we explore the common struggles that freelancers face with accurate accounting and how to ensure fully accurate accounting logs.
Join thousands of subscribers and stay-up-to date on product updates, resources and tips and tricks for freelancers.