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Managing taxes


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Managing taxes

No matter where you are and what you do, you're going to have to pay taxes or at least you're going to have to account for them even if your payment amount is zero. As with so many things, tax laws and practices vary tremendously from place to place. But here are some rules of thumb based on my own experiences. First, you'll have to continue to file personal taxes just you like you did as an employee. However, you'll probably also have to file business taxes based on the company's receipts. That doesn't necessarily mean that you'll end up paying more and in fact you might pay less, but it does mean more paper work.

Second, you'll probably have to change how you file and pay your personal taxes. Third, keep track of your business expenses for tax purposes. A lot of them will probably be tax deductible--that is, you won't have to pay taxes on the money you've used for them. Depending on your situation, that can make an enormous difference on your year end tax bill. There are two parts to keeping track of such expenses. First, note that they were for business purposes in your accounting software.

Second, save the receipts in an envelope until you do your taxes. Finally, file and pay your taxes as early as possible. Believe me they will pile up if you don't and this is something that no government is willing to forgive. On that note, I urge you to get professional help for taxes, at least the first time you file them as a freelancer. There are bound to be local peculiarities you didn't consider and you want to get started on the right foot. Having said that, anybody can eventually do their own taxes; it just takes thought, experience, and planning.

Managing taxes
Video duration: 1m 43s 2h 12m Beginner Updated Mar 20, 2013

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Managing taxes provides you with in-depth training on Business. Taught by Tom Geller as part of the Freelancing Fundamentals

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