taxes, any advice?

W

watson

Well-known member
so i'm trying to get prepared since the end of the year is coming, but i need some advice on taxes. I did a lot of freelance work this year and filled out a bunch of w9, when i got paid, taxes were not taken out. Anyone know of any good website that explain how to file as an indepdent contractor. Also i've been saving receipts for all film/work related items i have brought. I'm trying to get an idea of what percent i'm going to have to pay so i know how much to put aside. Any advice would be great. This is my first year working as a freelancer, so i dont really know what i'm doing tax wise. Thanks.

Andrew
 
Go to at least H&R Block, and preferably a CPA. You may have a situation. If you haven't been filing 1040-ES forms, as well as withholding for social security taxes etc., there may be penalties involved. Talk to a CPA and get a good handle on what you need to be doing so you don't run into problems next year. The good thing is you're asking about this while there's still time to do something about it (before the end of the year). If you have a day job, perhaps you can get them to perform a large withholding on your W-2, which may minimize or even eliminate any under-withholding you've done through the year.
 
I would also recommend going to a pro if you're even a little unsure of what to do...about 5 years ago I was in a similar situation and decided to do my own taxes....

It's very unnerving when you get a letter from the IRS that has phrases like "ongoing fine", "garnish wages" and "jail term". They don't even start out nice and get mean later, they just go straight for scaring the crap out of you...
 
Last year i got 1099's from a acouple companies, and got income from a part time job. I just downloaded turbo tax and filed a 1040, itemized with a schedule C. The Schedule C allows you to file as a personal business. Your allowed to write alot off and i was able to not only pay nothing but get every dime back from my parttime job in which i had money taken out from. Schedule C man, yu'll make out the best
 
Barry_Green said:
Go to at least H&R Block, and preferably a CPA. You may have a situation. If you haven't been filing 1040-ES forms, as well as withholding for social security taxes etc., there may be penalties involved. Talk to a CPA and get a good handle on what you need to be doing so you don't run into problems next year. The good thing is you're asking about this while there's still time to do something about it (before the end of the year). If you have a day job, perhaps you can get them to perform a large withholding on your W-2, which may minimize or even eliminate any under-withholding you've done through the year.
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If this is his first year as a freelancer then he should be okay filing his withholding all at once at the end of the year. The IRS doesn't require you to file quarterly unless you can make a 'reasonable' estimation of your quarterly earnings for the year. Seeing as this is his first year, there is no way they would expect him to file quarterly. The definition of 'reasonable' is obviously very flexible, but I think in this case it makes sense to do your social security, etc, all at the end of the year.

DEFINITELY go to a CPA. Anything you spend on figuring out your taxes is tax deductible anyhow, so there is no reason not to go. Ask your friends, or anyone who is in a similar line of work (freelancers) for a recommendation on a good one.

I finally found a CPA this year and let me tell you it is worth every penny.
I breath much easier now. It's easy to feel a bit overwhelmed and confused about tax issues, and it's much nicer to have an expert help you through it.

I can't say it enough - FIND A CPA. You'll be very happy you did.
:thumbsup:
 
hey guys, thanks for the advice. Yea i think i'm going to go H&R block or somewhere. I checked the 1040es form and it said that if you didnt earn wages the year before you didnt have to fill it out (i think). Because i would have no idea what i would own as Luis Caffesse said.

Yes, i have not paid any taxes this year. I have been keeping in mind that i will own taxes and have money set aside. I also havent earned a ton, i've been doing freelance work while attending school so its not like i've been doing it full time.

Is there anything else i should be aware of? Any one have a vague idea of what percent you tend to pay a year in taxes? thanks.

andrew
 
oh and to make things more interesting, i worked part time from the beginning of last year til the end of the summer. Then i left my part time job this fall when i was making enought off of freelance to get by. Does this effect things?
 
watson said:
oh and to make things more interesting, i worked part time from the beginning of last year til the end of the summer. Then i left my part time job this fall when i was making enought off of freelance to get by. Does this effect things?
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Not really (as far as I know).
Your part time job probably withheld tax for the money you were making through them, so that may wind up being wash. If they withheld more than you owe for the money you made from them, then that might help offset your freelance tax - but not by much.

Personally, I wouldn't worry about it too much if you've been setting money aside.
Though I guess that depends on how much you've been setting aside.

I pay my taxes all in one chunk too at the end of the year, and I've never had a problem. You just have to be organized and VERY disciplined in putting money away for that purpose. It can get tempting during lean parts of the year to slack off on saving, but trust me...it's not worth it.

Go see a pro and they'll set you straight. As as you gain more time working on your own you'll get a better sense of your expenses and how much you should be setting aside for taxes.

Oh, and get yourself a copy of Quicken or Quickbooks if you aren't using something similar already. Financial software is indispensible when you work this way (as long as you keep it up to date).

Good luck.
 
One thing that might help your tax situation is if you bought equipment in the taxable year. It can be expensed off but you have to list it. Otherwise it can be depreciated on a schedule the IRS has figured for certain categories of equipment. DO NOT TRY DOING A SCHEDULE "C" YOURSELF!!! You can probably make inquiries among pro photographers in your area and find some recommendations for a Tax preparer. I use a preparer and it does not cost the same as a CPA. They have to take training and be certified as a preparer. Find a good one. Another thing that I need do get that I have put off in my business is some business software for records. One that has really caught my eye is MYOB. "Mind Your Own Business. Check it out. It seems to be better than Quickbooks Pro or anything like that out there.
 
just figure the amount you earned and then look that amount up on the IRS chart = that should be the MAX so keep that set aside .. AND you have deductions so that will make it lower .. don't forget auto - you can either write off mileage or the car - i write off 52% of my auto ( depreciated over 5 years - audi TT = as my accountant says you don't need to carry equipment in it - just need to look good in it for the film business) .. check with your accountant - i deduct equipment/software under 250 in current year -over 250 write off over 5 year once the equipment/software is replaced ( as in upgrades) the remainder left on the 5 years is fully deducted when repalcement is purchased - same with software no longer being used = write it off as dead .. if you do not keep it 5 years -then accountant will make adjustments.
i pay quarterly fed & state taxes (since 1982) .. i have never been audited ..

don't forget about social security taxes = based on earnings after all your deductions ... if you can start a roth IRA contribute to it ...
 
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