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Freelance Retirement Planning: How the SECURE Act 2.0 May Impact Your Business

In 2020 the SECURE Act 2.0 was passed with some critical impacts for freelance businesses with a solopreneur owner and those freelance businesses with employees. Here are some key provisions that freelance business owners should be aware of regarding the SECURE 2.0 Act: The Act is intended to reduce the costs related to setting up and managing a self-employed retirement plan as well as those related to educating employees about their retirement plan options. Eligible employers with up to 50 employees may be able to claim a three-year start-up tax credit that equals 100% of administrative costs—up from 50%—that is

Summer Travel 101: Tax Deductions for Your Freelance Business

As a freelance business owner, if you travel for work to attend conferences or see clients related to your business, you are generally eligible to subtract any ordinary and necessary expenses you incurred such as transportation, airfare, meals, and accommodations. While you can’t directly deduct the expense of bringing friends and family on business trips, some costs can be offset indirectly. Some examples: Driving to your destination Have three or four empty seats in your car? Feel free to fill them. As long as you’re traveling for business, and renting a vehicle is a “necessary and ordinary” expense, you can

Are You Owed a 2019 Tax Refund? File Your Freelance Return by July 17, 2023

Are you one of the nearly 1.5 million people across the country who has an outstanding 2019 tax return? If so, you only have a few weeks to claim your refund before the July 17, 2023, deadline after which your unclaimed refund will vanish. According to the IRS, there are almost $1.5 billion in refunds that are unclaimed because taxpayers have not filed their 2019 tax returns yet. The IRS estimates that the average median refund for tax year 2019 was $893. Taxpayers have three years to file and claim their tax refunds. If they don’t file within three years,

Freelancers Owing Back Taxes in New York State May Be Eligible for the Voluntary Disclosure and Compliance Program

If you are a freelancer doing business in New York State and you have not filed your taxes in any of these categories: income tax, corporate tax, or sales tax, you may be eligible for New York State’s Voluntary Disclosure and Compliance Program. This program allows taxpayers with unfiled taxes to voluntarily declare this and pay what they owe. According to the New York State Department of Revenue and Taxation there are “significant incentives” for taxpayers who admit they have not paid their taxes and pay them. These incentives include waiving penalties and not bringing criminal charges against delinquent tax

Digital Nomad? Freelancer Living Abroad?

Avoid Penalties by Filing Your 2022 Taxes by the June 15 Do you operate your freelance business while traveling or living abroad? If so, and you are a U.S. taxpayer, it is critical for you to file your 2022 federal income tax return by Thursday, June 15 or to file an extension if you are eligible for one. This deadline applies to both U.S. citizens and resident aliens abroad, including those with dual citizenship. Do you qualify for the June 15 tax deadline extension for your freelance taxes? You may qualify for the June 15 filing deadline if both your

The IRS is Ramping Up Enforcement with New Funding Here’s What Freelancers Need to Know

The IRS recently announced its 10-year strategic operating plan, which lays out how the agency will deliver tax services in the next decade and how it will allocate the $80 billion funds it received as part of the Inflation Reduction Act (IRA). There have been predictions made that the increased funding will result in more scrutiny for higher income taxpayers and the self-employed, especially when it comes to enforcement. As a freelance business owner, here is a break down of what you need to know: The IRS plan is structured around these key objectives: Significantly improve services for taxpayers to

Bonus Payments: How Do They Impact Your Personal Taxes?

If you receive a bonus it is usually a cause for celebration, at least in the short term. Whether you receive a bonus on a contractual basis, as a performance award, or for an end-of-the-year perk, it is important to understand how they may impact your taxes. First, any bonuses you receive are taxable at the federal, state, and local levels (depending on your specific tax nexus). Be sure that you check what tax obligations you have in each of these areas. Next, be aware that federal tax withholding is mandated at 22% for bonuses because they are treated like

Learn How to Avoid Owing Unexpected Freelance Tax on Restricted Stock Units

If you are a freelancer who has received restricted stock units (RSUs) as part of your compensation, you need to ensure that you are withholding taxes appropriately, or else you could end up owing money to the IRS at the end of the year. In this article, we’ll break down why, and what you can do about it proactively to avoid the situation. First, let’s define what an RSU is: Essentially, it is a substitute for an actual stock grant. This means that when a company gives you an RSU, it is in lieu of company stock, but it will

Are You a New Freelancer? Here’s What You Need to Know About Filing Your Taxes

What do driving for a ride-sharing company, renting out a room through a rental service and working for a company that outsources errands and tasks have in common? These are all income-generating activities in the gig economy on which income tax will be owed. A recent survey from Fiverr found that 73% of Americans plan to do freelance work this year in some capacity. If you are one of them it’s important to be aware of your tax obligations. As a gig economy worker, it’s your responsibility to keep track of the money you make and report it on your

Can’t File Your Freelance Tax Return or Pay Your Tax Bill? Here’s How to Reduce the Penalties You May Owe

Not sure you can pay your freelance tax bill or file this year’s tax return on time? Like any taxpayer who doesn’t meet their tax obligations, you may owe a penalty. You may also owe multiple penalties, depending on your situation. If any of the following situations apply to you, the IRS may charge a penalty: Failure to file your tax return on time Paying the tax you owe late or not in the right way Not preparing an accurate return Failing to provide accurate information returns Interest may also be charged on a penalty if it is not paid

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