Published by Yuwanda Black, Site Editor
Written by Yuwanda Black
Yesterday, I spent the day doing my taxes. Uggghhhhh! Numbers, numbers, for days. I’m a right-brain person – creative, artistic, etc. Numbers are NOT my thing.
Annnyyyhoooo — after I got over the trauma of having to face numbers all day, well, it got kinda fun. You see, doing taxes brings you face to face with what you’ve accomplished (or not) over the past fiscal year. And, with all that data right at your fingertips, it’s fun to kinda parse it different ways, eg:
What did I earn on average per month, per week, per day?
Where are my profit centers?
What do I need to add more of?
Do less of?
Cut out altogether?
Do I need to raise my freelance writing rates?
Lower my freelance writing rates?
Bundle services more?
Concentrate on X types of projects?
Doing your taxes gives you a wealth of information. It’s one of the reasons (really the only reason) I actually enjoy doing my taxes — ONCE all the financial data is logged and categorized.
But, I digress — majorly.
Today’s tax day, so following are five last-minute tax tips that can help you keep your sanity — and possibly save you money at the same time.
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If you’re stressing about filing, don’t. Simply file an extension. It’s quick, easy and free to do so, and can be done right online. And it gives you another six months to file (until October 15th).
If you mail this form, it must be postmarked today. As most post offices stay open late on tax day (usually until midnight), this gives you plenty of time. If you use online software like TurboTax, you can do so right from there — electronically. They send you a notice letting you know that it’s been accepted by good ole Uncle Sam. See, I got mine last night?
Filing a state tax extension
Note: Many states will automatically grant ou an extension if you’re given one from the federal government. Again though, you must pay your state taxes on time (ie, today) if you owe. Check with your state tax office for details, as it varies from state to state.
Why I Filed an Extension This Year
Usually, I file my taxes a few weeks early. But, I’ve been out of the country — here in Jamaica – for many, many months). Hence, I need to collect all my documents from back home in the U.S., which won’t happen for a couple of months.
Now, just because you file an extension, it does NOT give you more time to pay.
An extension is simply more time to get your documents in order, eg, in case you live/travel abroad, are serving in the military, are waiting on documents to come in from employers/clients, etc.
FYI, here’s a great tax calculator for giving you a rough estimate of what you owe.
Remember, the more thorough you can be when estimating your taxes, the less chance you have of underpaying — which means you’ll owe penalties and interest on that unpaid amount when you do file. So risk overpaying instead of underpaying because the IRS penalties and fees can be steep.
If you’re one of the lucky ones who won’t owe (ie, are expecting a refund), there’s no penalty for not filing your taxes today. Yep, it’s true!
So if you think you’re going to get money back, you don’t even have to stress about filing today. Now how cool is that!
I tend to like to have the TV on in the background when I’m working. But, when I’m dealing with numbers, I need silence, silence, silence. So if you’re determined to get your taxes done today, turn off everything, eg, your phone, TV, music, etc. Devote a dedicated block of time to just hunker down and get it all done.
Before you do this, make sure you have all your documents in one place. The beautiful thing about freelance writing is that most of your stuff is online, eg, payments from clients, subscriptions, credit card receipts for expenses, banking statements.
The reason I was able to get an accurate estimate of what I owed (yeah, I always friggin’ owe!) is that everything was right online. So, even from a foreign country and even without actually having documents (eg, 1099s) in front of me, I knew EXACTLY what I earned because my business is 100% online. I received NO paper checks last year.
Hallelujah — finally got all clients to paying online! Major, major accomplishment.
If you find that filing taxes was a bear this year because you were so unorganized, the best thing to do about that is to start getting organized — right now — for next year.
We’re four months into the year already, so don’t let the fact hat you’re four months behind organizing receipts, payments, etc., keep you from starting to do so today. You can make time later to go back and tackle the months you missed. But if you make organizing your financial life a habit right from today, you’ll be so glad you did next year come tax time.
Whew, you’re done. You got Uncle Sam outta your life for one more year. Now, go out and celebrate!
FYI, don’t forget to check out the related posts below for more first-hand info on freelancing and taxes.
Get the exact knowledge that pushed my freelance writing career to the next level – allowing me to travel and live abroad, get out of debt and really “live the freelance life.” One freelancer wrote:
I hope all is well! I just wanted to let you know that this month marked the first month that my writing income surpassed that of my day job.
Thanks to your help and inspiration, I have more work than I know what to do with and have successfully landed a number of clients that give me recurring work. Thanks again for your advice!
Posted on April 15, 2014
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