Freelancers run their own empires, and we’re here to make sure those empires don’t crumble because of some lame ass accounting error. Also! Pointers on taxes, being a boss, and owning your sh*t.
$$$ This Is How You Get Money $$$
Finance for freelancers can be complex, but there are some things you can do to help simplify it:
- You have to have a separate bank account and or credit card for business expenses, no matter how small a business you are, it just clears things up a ton
- Freelancers have super special tax advantaged retirement accounts available to them which allow for savings for the future and a smaller tax bill now. You take money from one pocket and put it in the other and you just pay less taxes.
Here are three important tips to take into consideration if you’re a freelancer:
- If it’s your first year freelancing, you might be shocked by a larger tax bill than you’re used to paying. There’s no more automatic withholding of the tax you owe from your paycheck so you have to calculate what you owe on your own, or with the help of an accountant.
- Don’t sleep on the SEP-IRA. You can contribute about 20% of your net freelance income to this special retirement account. The best part is that the deadline to contribute is when your tax return is due, not by the end of the year. So, April 15th or October 15th if you go on an extension.
- If you’re interested in turning your side hustle or freelancing income into something a little bit more legit, you’ll need an EIN or an Employer Identification Number. you can get one for free from the IRS or an accountant can help you set one up.
And if you’re a freelancer just remember you are a real business already. All you freelancers out there, freelancing and owning your own business is one of the best ways to generate wealth in this country—you’re out here hustling and making a dollar for yourself, so good on you. We see you.