The world of freelancing can be a beautiful one.
A flexible schedule, freedom to take on the type of work you want, and the autonomy to set your own rates are some of the most attractive aspects of life as a freelancer. However, as freeing as the style of work can, certain administrative complications can arise if you’re not careful, particularly with taxes. Since the Internal Revenue Service (IRS) look at freelancers to be self-employed, taxes must be filed in a similar manner as a business owner’s. What does that mean? Deductions are king.
The IRS says: “Taxpayers can deduct expenses paid to run a business that are both ordinary and necessary. An ordinary expense is one that is common and accepted in the industry. A necessary expense is one that is helpful and proper for a trade or business.”
As helpful as it can be to rack up deductions, it can be hard to track them all through the year if you don’t have the right toolkit. Thankfully, we’re here to help. Here are some of the best apps for freelancers come tax time.
The Wave App is an incredibly intuitive accounting that allows you to run payroll, manage invoices, keep track of finances and track receipts almost intuitively.
Expensify does a phenomenal job of managing receipts and expenses by allowing document scanning, mileage tracking, and expense report creation all by just syncing it with your bank app.
As Rocket Money describes, it “helps you get organized for tax season by identifying transactions which might be tax deductible. This information can be used to help you decide whether or not to itemize deductions, and to keep track throughout the year in preparation for filing.”
As a premium member, I can personally attest to the power of Rocket Money. My tax preparer can as well.
TurboxTax is thee OG tax site that allows users to file their own taxes without relying on an outside preparer.
Freelancers are able to use the software to file taxes for $120 which can save you thousands in accounting bills. The software also offers the Turbo Tax Live in which you can connect virtually with a CPA or EA to take a look at your return and review it before submitting your tax forms to the IRS.
FreeAgent allows automated invoicing, client follow ups, time tracking and syncing with tax apps to help for a seamless filing season.