For those who've chosen to leave the traditional working world to freelance, the transition can be liberating. However, what comes with that new sense of independence is being responsible for income tax management. The business accountant at Joe Heard, CPA in Checotah, OK, shares a few helpful tips on tax return preparation and how to make the filing season stress-free. 

3 Tax Return Preparation Tips for a Stress-Free Filing Season

Keep Meticulous Records

It's always helpful to maintain records of all receipts, invoices, and other important documents. The IRS and state tax agencies may want them attached to a freelancer's tax returns. In addition to keeping a paper trail, back up all documents through PDF files or other online software programs.

Take Advantage of Deductions

This is where an experienced accountant can be helpful. They'll tell you whether it's more financially feasible to itemize deductions or take the standard deduction. Either option may reduce any taxes owed. However, to be eligible for deductions, the freelancer's wages must be higher than 2% of their adjusted gross income.

Calculate Estimated Taxes

Freelancers and sole proprietors are responsible for calculating and paying taxes on all their earnings. Since the tax rate varies by state, filers need to know what percentage to deduct. The IRS typically wants estimated taxes to be paid each quarter if the person makes more than $400 for the year.

These are just a few tips to help freelancers stay proactive on their tax return preparations. There are a number of other ways independent workers can reduce any taxes owed. Let Joe Heard, CPA be your trusted partner. To arrange a consultation, call (918) 473-1492 today. Visit the website for more information on a wide range of accounting services.