Become a Freelance Accountant: 9 Tips to Succeed in Freelance Accounting

tax accountant for freelancers

If you are HQ and work in Minnesota but sell a website to someone who lives in Texas, you won’t be required to collect sales tax (minus some specific circumstances). Your sales tax is due to the states you accountant for freelancers work in/reside in, so typically interstate sales don’t qualify. Most states have chosen to make it that if you collect more than a set amount you need to charge sales tax for items sold in their states.

tax accountant for freelancers

If you must maintain employment or tend to personal commitments while pursuing a degree, part-time enrollment may be the best option. While it takes longer to complete a part-time program, earning income while taking courses can relieve some of your financial burden as a student. An enrollee can complete this program 100% online or in person and “fast-track” a master’s degree in accounting to earn an undergraduate and graduate degree in the field in five years. Many learners pursue internships or join student clubs, like the National Millennial Community and the Spartan Investment Club, to network with peers in business and accounting.. From personal tax returns for individuals to tax preparation for small and mid-sized businesses, Li & Zheng CPA PLLC has experience you can trust. We make it our goal to keep pace with current federal and state tax regulations in order to prepare accurate tax returns for all of our clients.

Require a CPA, law license or enrolled agent designation

The COVID-19 pandemic is responsible for the loss of millions of jobs. Many of the newly unemployed have taken work as independent contractors or started their own businesses, many of them working out of their own homes. For the first time, all of these people will need to deal with employment accounting and taxes that involve a Form 1099 instead of a W-2. Even the smallest business can benefit from a cloud-based accounting service. Our top tested performers provide all the tools and features freelancers need to keep a tight rein on their finances, without costing them fortune. We pulled this data from reliable resources such as IPEDS and individual school and program websites.

Keeping track of all your income can be more difficult than if you were a traditional employee, in which case you’d get a single W-2 form for reporting purposes. As a freelancer, you’re likely to get numerous 1099-NEC forms, (1099-MISC in prior years) one from each of your clients. If you receive payments through online payment services such as PayPal, you might receive a 1099-K. Most businesses should be fine starting out as a sole proprietorship, but you may want to consider whether you should be an LLC (typically if you have any potential liability). Once you’ve decided  what entity type you want, you’ll need to file with either the Secretary of State (for LLCs, etc) or with your local county (if applicable for DBA/sole props). Filing with the Secretary of State is preferable but can have additional costs.

How Do Freelance Accountants Get Paid?

The IRS requirement for business tax deductions is that expenses must be ordinary and necessary. All web design services are taxable by the IRS, but exactly how will depend on the nature of your business. Please note that the services can be offset by certain costs, which means normally only your net revenue is taxable. Digital products encompass things like graphic designs, music, eBooks, photographs, etc that are sold in a digital format. Some distinguish between whether an item is rented or bought (rentals are not charged tax on but purchases are).

Furthermore, the long hours, demand from clients, and pressure to lower fees can all contribute to added stress. Freelance accountants face several stressful situations in their work. You may also have to log payments and expenditures, including payroll, purchase orders, and invoices.

Accountant & Tax for Digital Agencies & Freelancers

By gaining an understanding of your priorities, we can work together to solve problems and address concerns in a timely manner. Businesses and individuals who choose our firm can rely on competent advice and reliable, efficient personnel. We provide our clients with the highest quality of service, confidentiality, and attentiveness to our clients’ needs.

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