As a multitasking #momboss, I thought I should share some TaxTips too! So from now until April, I will be giving you a monthly set of tips on the subject including a Tax preparation checklist, how to prepare for taxes as a freelancer, things you need to know before filing your return, ways to save more for family travel, and more! This is money smart stuff every #Boss should know.
Here's my first tip. THE PLATFORM I USE TO FILE MY TAXES and the one I recommend: TaxAct Why?
1. It is incredibly easy to use (the most user friendly platform I have used)
2. It has a free option
3. It is super quick, thanks to how they structure things
4. You can import your taxes from previous years and other platforms (I have used other platforms previously too and I like TaxAct so much better)
5. There's free account support in case you need any help
6. It helps you claim every tax deduction and credit you deserve, like the $2,000 Child Tax Credit. (I’m most excited to add that one this year to my return!)
7. And you can get up to a $100 refund bonus. Click here to find out how.
My second set of tips are about doing your taxes if you have just recently started freelancing. There are a variety of factors that you need to understand to best prepare and do things right. So I put this together for you:
HOW TO PREPARE FOR TAX SEASON AS A FREELANCER
1. The most important thing is to be ABLE to PAY your taxes. Securing the money to cover the bill. You can’t live paycheck to paycheck if you are a freelancer, you need to save money each month to financially prepare for your tax liability. The best way to do that is to route at least a 30% of each paycheck directly into a savings account that is earmarked just for paying taxes. And ideally, put 40% and be able to put what’s left into a retirement savings. 2. Stay on top of your quarterly-estimated payments through the year instead of waiting to pay your tax bill at the end of the year, because you could pay more than you need to in the long run.
3. Track all your business expenses and keep proof of those expenses in the form of receipts if you are planning to claim tax deductions. You will need paper trail in case of an audit.
4. The platform I use, taxAct offers a calculator to help you figure out your self-employment tax. I absolutely love this platform because they simplify every step, and they offer free account[AR1] support in case you need it so you will never feel stuck. Click here for the Self-Employment Tax Calculator!
5. You will probably need to file a Schedule C which reports the income or loss you generated from your business. Your tax return is due the same day as your employed friends, April 15th 2019.
6. You are expected to pay taxes on ANY income earned, even if you have worked for an international company.
My third set of advice for Tax season is, be informed & prepared. Here are 5 things you should know before filing your taxes:
1. The tax rates have changed for everyone (you can also find a chart on the blog)
2. The standard deduction nearly doubled (A pre-set dollar amount that reduces your taxable income (single is $12,000, married filing jointly/surviving spouse now is $24,000, married filing separately is $12,000 and head of household is $18,000)
3. Miscellaneous deductions were suspended (this includes expenses like unreimbursed employee expenses, safe deposit fees, investment management fees and union dues)
4. Personal deductions were eliminated (you can no longer claim a personal exemption deduction for yourself, spouse or any dependents)
5. The State and Local Tax deduction is capped at $10,000 (the amount you can deduct in one year is now capped at $10,000 which means you can deduct up to $10k in property and income tax or sales tax on Schedule A which was previously unlimited)
You can also check the Taxact check list here to make sure you have everything you need and are able to file quick and easy, stress free!
And my 4th and final set of Tax Tips before filing are here! This one is for you specifically, moms.
A majority of the moms manage the entire household. That means everything from laundry and cooking to paying bills and overlooking the finances. Because even if we delegate certain chores, we still are the ones who typically organize how, when and who we delegate them to.
But when it comes to a family’s money, taxes are sometimes overlooked. Yet, taxes are an important piece of any family’s complete financial picture. Filing a tax return can yield one of their biggest “paychecks” of the year, which comes in the form of a tax refund.
To help your family achieve the best tax outcome possible, here is a link to read everything about "what moms should know before filing the 2018 tax return" and another link here to read about "what families need to know about Tax Reform" because it impacts the tax outcome for many Americans, including families, and many of the changes can potentially boost the tax savings for busy moms and dads!
Remember, the due date for filing taxes is April 15!
Thank you to TaxAct for sponsoring this post.