For the estimated 57 million U.S. freelancers and gig worker in business today, just knowing how to run your business isn’t enough – you have to know how to file your taxes as a 1099 career professional.
The number one action step for freelancer handling their own taxes? Know your deductions, says Lisa Greene-Lewis, CPA and tax expert at TurboTax.
“There are plenty of big deductions, like start-up costs and web site development, that enable you to lower your taxes as a freelancer,” Greene-Lewis tells TheStreet host Gregg Greenberg in this special video series.
A message from our TurboTax partners: Whether you’re a freelancer, independent contractor, small business owner, or have multiple sources of income, we’ll help you uncover industry-specific deductions you qualify for to get you every dollar you deserve. It’s free to start, and enjoy $20 off TurboTax Self-Employed when you file.
When you do go tax-deduction hunting, make sure you balance the need for lower taxes with the need to satisfy your tax obligations with Uncle Sam. “There is a risk of underpaying your taxes with too many deductions,” Greene-Lewis noted. “Penalties can be triggered when you underpay your taxes.”
Additionally, you’ll need to know when to pay your taxes, too, and at what income limit.
“Generally, when you’re self-employed, and you expect to earn at least $1,000, you’ll need to file your taxes as a Form 1099 freelancer,” Greene-Lewis said. “Make sure you do so the IRS’s preferred way -- paying estimated taxes on a quarterly basis each year.”
TurboTax can help freelancers figure out their taxes, especially on the “underpaying versus overpaying” front. “We’ll help you figure out your estimated tax payment as you file,” Greene-Lewis said. “We’ll also help you find qualified tax deductions that can lower your tax payments.”
Green points to TurboTax’s industry-specific tax deduction finder, which can, as Greene-Lewis puts it, “help you find deductions you didn’t know you were eligible to receive.”
With one in five Americans starting a freelance business every year, startup costs can really add up in key areas like advertising and marketing.
“The good news is that TurboTax can help you find tax deductions in those areas and others, and we’ll file them for you with TurboTax,” Green-Lewis said.
More tax tips from TurboTax: