Usually freelancers have a unique skill or talent that can land them gigs. From musicians to graphic designers, side jobs are endless these days. But, because solo entrepreneurs are so focused on their projects, it becomes necessary for them to have an accountant that they can trust and depend on when it comes time for taxes. Here are some reasons why you should let your freelancer friends know about coming to Beyond Accounting for tax and business advice:
1. Freelancers need to change from being hobbyists to being business owners | If your want to grow your business, be successful, and show the IRS what you're up to, you need to have a business plan. Additionally, consult with your accountant to make sure this plan is up to snuff if an IRS audit plays into your future.
2. Freelancers should have personal AND business bank accounts | Oftentimes, people who freelance or have side gigs run the whole operation out of their personal bank account. Having everything separated makes it much easier during tax season and your accountant will be able to tell you quickly about your business' financial health without personal interference.
3. Freelancers can't spend every penny they earn | Unlike a traditional job, 1099 workers need to have enough money to set aside for retirement, pay for health insurance, and post for business expenses. Not to mention, that because funds aren't coming out of a paycheck at a regular interval, the taxes will have to be paid at the end of the year when filing. If you don't have enough saved, your accountant will be helping you set up an installment agreement with the IRS. Instead, you should have your accountant balance a budget that includes having enough for these types of expenses before it all leaves your wallet.
1099 workers aka freelancers need to have an accountant look over their unique situation. Doing this could mean the difference between staying solo or going to work for the man.