How to be Prepared For Taxes | Freelancer Friday
It’s Freelancer Friday!
This week we’re covering everybody’s least favorite topic… taxes. Our American tax system has a “pay-as-you-go” model, meaning if you are self-employed or currently earning untaxed income, then the IRS wants you to pay your estimated taxes quarterly (hence “as-you-go”). As of today, July 29, 2022, we are about four weeks away from the close of this quarter, meaning your corresponding taxes will be due on September 15, 2022.
BUT! We have you covered. Your cashflow tab now shows you your Tax Estimates and amount withholding to date. Check it out! (Note: make sure you have accounts connected to see this!) We are able to do this by automatically withholding a percentage of your earned cash to save towards your taxes. Of course, this amount will vary based on how much you earned, the state you live in, whether or not you have dependents, and whether you file dependently or independently. We hope this helps keep you on top of you finances and make tax season(s) a little more bearable.
Last week some of you shared your tax tips for this edition of Freelancer Friday. Here is what our Freelancer community had to say:
Freelancer : Dillon
Years Freelancing : 3
My #1 tax tip : Know when your estimated taxes are due!!! Here, I’ll make it easy for you with SumIt’s downloadable Tax Calendar.
Freelancer : Gina
Years Freelancing : 2
My #1 tax tip : You don’t have to make estimated tax payments UNTIL you have income on which you will owe tax. For example, if you didn’t make any money in the first half of 2022, then you don’t have to make an estimated tax payment until you DO start earning money.
Freelancer : Andrew Sean
Years Freelancing : 4
My #1 tax tip : I hope this goes without saying, but being blindsided by the amount of taxes you owe is an awful feeling (trust me). My advice is to stay on top of your finances and set aside money specifically for taxes as you earn it.
