Tax Preparation Checklist for Entrepreneurs & Freelancersby Agro Accounting CPA Accounting for Artists, Freelancers & Creative Com
Paying taxes out of our income to the government is not just a legal responsibility, it is a civic duty! We do not pay taxes for no constructive reason. As we pay taxes purposefully, they are used for the betterment of our country and to provide public services to us. So, if we pay our taxes, then we are benefiting everyone, including ourselves. To follow, when you are doing your tax preparation for entrepreneurs or tax preparation for freelancers, there are certain things that you need to handle beforehand.
You Should Prepare Your Supporting Documents
When preparing your supporting documents, understand your responsibilities, which include collecting all of your records on expenditures and more.
To prepare these supporting documents - balance sheet and others - to match your balance sheet and to carry out all of your bookkeeping work takes time. When you are doing your tax preparation for entrepreneurs or tax preparation for freelancers, do it thoroughly and precisely. Your balance sheet should match. Further, the primary documents you need to collect and prepare are:
● Mileage Logs for Your Vehicle - If your vehicle is completely dedicated to your business, then you can count the total miles you have travelled. However, if you use your car for both personal and business purposes, then you need to note logs distinguishing between the two. In particular, you need to make note of business miles travelled.
● Your Expenses Records - When you are preparing your income taxes for entrepreneurs or income taxes for freelance workers, your expense records should be properly stored and organized. Keep in mind that all of your business expenses are filed on your income tax return and may come under scrutiny during an audit.
● Your Bundle of All Receipts, Bank Statements & Invoices - All paper and electronic receipts of expenses (see above), bank statements for the year and invoices should be documented in your accounting files. To keep your books clear and managed, you need to keep a record of all income and expenses written and acknowledged.
● Balance Sheet of the Business, and Your Business Ledgers - For the balance sheet of your business, keep all debits and credits in balance. All of your transactions, amounts paid and amounts received will be calculated and recorded in your business ledgers. A perfectly matching balance sheet might need to be filed with your business tax return. This work is generally best done by a professional accountant for freelance workers or accountant for entrepreneurs.
● Every Proof of Income - When you are preparing your income taxes for freelance workers or income taxes for entrepreneurs, you need to record every sort of income that you have earned and the amounts of which you have received.
Aside from these main
points, there are many more things to know about income tax preparation. For that reason alone, you should hire an accountant consultant for freelancers or
accountant consultant for entrepreneurs. They are the ones who can guide you best!
Created on Aug 10th 2020 06:52. Viewed 244 times.