Five Things You Need To Know About Freelance Taxes

Freelance Tax 1099 Deductions Business

Freelance Issues

As the gig economy continues to grow more and more, Americans are classifying themselves as freelancers. With this growth comes a level of ignorance of tax laws. Here are five things you need to know about freelance taxes:

All Income Must Be Reported―With or Without a 1099

Even if you never receive a 1099 from your employer you are still required to pay your taxes. It’s vitally important that you do what you can to keep track of every dollar you earn, because if you don’t, it could come back to hurt you in the long run and could also increase your chances of being audited by the IRS later in life.

Nothing Below $400 Should Be Filed

Did you recently make $100-$400 on a side project that you worked on for a neighbor? No worries. Anything that is under $400 does not have to be filed. Additionally, when you are classified as self-employed you have the ability to subtract your business expenses which in some cases could have you bringing in less than $400 in net profits.

You May Have to Pay Additional Taxes on Your Income

This is where things can get sticky. As a freelancer, you are both an employee and an employer which sadly means you are now responsible for not only paying the employee side of taxes but also the employer side.

Claim Your Expenses

Do you have a home office or a place in your home that you designate as some sort of home office? There’s great news! You can actually claim that portion of your expense. Additionally, you can also claim things such as rent, mortgage and property taxes. Items such as cleaning supplies may also be deducted under certain circumstances.

Don’t Be Afraid to Hire an Accountant

If you are unsure of how to handle your taxes as a freelancer don’t be afraid to hire an accountant. An accountant can work with you to make sure you are properly documenting and reporting all of your freelance income.

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Why You Should Hire an Accountant after Getting Married

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Marriage & Finances

You’ve said your vows, partied all night, honeymooned for (at least) weeks, and now that the wedding festivities are over, it is time to begin your life together. While discussing finances may be tough, it’s a discussion that is necessary to the success of your marriage. According to current statistics, about 57% of divorces are caused by disagreements or stress over finances; hiring an accountant could eliminate this problem before it ruins your marriage.

Want to avoid the curse of financial divorce? Here are a few reasons why you should hire an accountant after getting married:

To Avoid Divorce

Avoiding divorce is the most obvious reason why most married couples should hire an accountant. The statistics are not in favor of those couples who refuse to discuss financial records and so, as a couple, you and your spouse should both be committed to hiring an accountant even if it’s just as a way to fireproof your marriage.

To Pay Bills

Who should pay the car payment? Who should pay the light bill? These are all questions that everyone asks, especially newlyweds; and instead of allowing these questions to cause disagreements, an accountant can mediate the conversation. Your accountant will be able to determine what makes sense financially, and he or she may even recommend that all bills be split evenly down the middle.

To Discuss Past Credit and Current Debt
At some point, you and your spouse will probably have to make a large purchase together, such as a house. Because of this, it’s important that you discuss your past credit and current debt with an accountant. Doing so will show the both of you what you need to work toward in order to position your family to receive loans in the future.

To Handle Finances

Will you and your spouse keep separate accounts? Will you have a joint account for certain spending practices? Whatever the case may be, your accountant can help you handle your finances in ways you and your spouse may never be able to.

Did you recently get married? What are you waiting for―hire an accountant today!

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Three Tax Tips for Small Business Owners

No one looks forward to doing their taxes, especially small business owners. Small business owners often have to do a great deal of work on their business taxes given that they are left to manage their company’s affairs. Since this is the case, here are a few tips for small business owners which can help them navigate the tax season mine field with greater competence:

Small Business Owners Tax Organize

Tax Tips for Small Business Owners

Organize on a Monthly Basis

Organize, organize, organize. The key to being successful during tax season as a small business owner is to make sure you organize your records on a consistent basis. It is suggested that you organize monthly to make sure you don’t miss any important steps.

Review Business Finances

Just like staying organized is important, reviewing your business finances is also important. Reviewing your business finances is what will prevent you from getting any end of the year unpleasant surprises.

Plan for Estimated Taxes

When you fail to plan, plan to fail. If you really want to make sure that you are adequately prepared for tax season, plan for estimated taxes. Your accountant can help you specifically with planning for those estimated taxes to ensure that you can begin saving for taxes before they come.

What tips do you have for small business owners to help them plan for taxes? Leave your comments below.

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Three Tasks Your CPA Should be Completing on a Daily Basis

Daily Task CPA Accountant Company Responsibility

Daily Tasks of Accountants

Contrary to popular belief, Certified Public Accountants (most commonly known as CPAs) don’t always look the same for different businesses. For example, a small carpet cleaning business may not have the same needs as a Silicon Valley start-up company which has recently received a large investment from a venture capitalist firm. Because of this fact, the day to day responsibilities of a CPA can look very different depending on the circumstances of the individual case; however, even though their responsibilities may vary, here are three things all CPAs should be doing on a daily basis whenever they’re employed full-time for a company:

Balancing Expenses

Are you constantly spending money in all forms―cash, check, credit card or even automatic withdrawal? If so, it may be a wise idea to make sure your CPA is balancing those expenses on a daily basis to ensure that you’re not spending money that you don’t have in your bank account. Careless spending continues to be a problem for businesses across the world.

Finding New Growth Opportunities

One important task which accountants can assist any business with is searching for growth opportunities. Because your CPA is constantly looking at your finances they can easily identify opportunities for growth, whether it derive from buying an additional product or item or even hiring a new employee.

Documenting All Financial Records

Whether they do it using a filing cabinet or saving it onto your company’s hard drive, you will want to make sure that your account is documenting and organizing all of your financial records to make sure you’re not losing track of important documentation that you will need during tax season.

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Four Questions Small Business Owners Should Ask Their Accountant

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Questions for Your Accountant

An accountant is by far one of the greatest assets your business team can have. They are there not only to help your company with the financial aspects of business, but also to serve as a critical business growth component. In order to get the most out of any accountant that you have on your team, it’s important to know what questions to ask him or her. Here are four questions small business owners should be prepared to ask their accountant:

What’s Important to You?

Before getting too deep into a relationship with your accountant, you want to make sure you are setting clear expectations of what it is you need. Be clear from day one if you want someone to provide financial guidance or if you just need an accountant to help you prepare your taxes once a year. This one question will let you know if your accountant is right for your business or not.

What Technology Do You Use?

DOS is still being used throughout the accounting world; however, it won’t be a tool that can be used forever. Because of this, you will want to make sure that your accountant is open to learning brand new technology systems as they become available. As cloud technology continues to increase in popularity, it would be advantageous if your accountant remains open to learning how to use those systems.

How Do You Stay Current with Industry Trends?

Whether your business pays for it or not, it’s important that your accountant continues to stay educated on industry trends. This could include, but is not limited to, being open to change as well as being open to new ideas as they evolve within the accounting industry.

What’s More Important: Value or Compliance?

Compliance is important, but there’s more to accounting than just compliance. Sure, an accountant needs to have the ability to ensure you remain compliant with all applicable rules, but an accountant can offer so much more value. Value means being able to provide financial advice, tax advice or even budgeting advice. While it’s not mandatory, having an accountant who focuses on value will prove to be more beneficial to you in the long term.

What questions have you vowed to ask your accountant? Leave your comments below.

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How an Accountant Can Benefit Your Small Business

Small business owners are known to have a lot of things on their plate. They are forced to not only manage all aspects of their businesses, but they also have to take care of their homes, their children and a whole host of other things.

Accountant Business Small Benefit

The Benefits Conferred by Accountants

Here are a few ways your accountant can benefit your small business:

Bookkeeping

In order to accurately keep track of your payroll services, you want to make sure all your finances and books are in order. An accountant can help you make sure all of your accounts are not only accurate but balanced. This could include everything from managing transactions, accounts payable and accounts receivable, collections, inventory and a host of other activities.

Payroll Data Entry

Whether you pay your employees on weekly, daily, or even monthly basis, payroll can be very stressful. Hiring an accountant to manage your payroll data entry could give you some much needed extra time. Best of all, your payroll is probably much easier for someone who is actually trained to handle things such as payroll, which in most cases is probably not you as a small business owner.

Tax Filing

Everyone stresses out during tax season: you’re wondering how you’re going to be able to pay people back, and most of all, you’re forced to figure out if you’re actually making the right choices when filling out your tax forms. Filing taxes can be stressful for a personal taxpayer, but it can be downright maddening for a small business owner. You can make sure you eliminate these stresses by leaving your tax filing status in the hands of your accountant.

What ways does an accountant benefit your small business? Have they helped your business in ways you never expected? Leave your comments below.

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Three Stresses Accountants Can Help You Eliminate

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Accountants Can Eliminate Stress

Sometimes the task of running a business can be overwhelming and very stressful. Some of this stress is unavoidable, but there are things that you can do to eliminate some of this work related stress, and one of the most important things you can do is hire an accountant.

Here are three sources of stress which an accountant can help you eliminate:

Accounts Payable Stresses

Managing accounts payable is often a source of stress for business owners without an accountant. Accounts payable is defined as an accounting entry that represents an entity’s obligation to pay off a short-term debt to its creditors. A good accountant will not only help you pay off your short-term debt to your creditors but can also work as the intermediary for your company and those who you have to pay back.

Employee Salary Stresses

“I need a raise” is a phrase most employers have heard on numerous occasions, and while they may believe their employee deserves a raise sometimes the money just isn’t available. Handling these salary stresses over to your accountant could be one of the best decisions you ever make simply because you can now redirect all of those salary inquiries to your accountant who will be able to share when a raise could be financially possible for the company (or even deliver the news that it would never be possible).

Balancing Checkbooks

Everyone loves to make money and spend money, but not everyone likes to balance checkbooks. If you’re one of those business owners who has a hard time balancing your checkbook then hiring an accountant can be a life saver. Not only will you no longer have to worry about balancing your checkbook but you also will no longer have to worry about spending money before you have it in your bank account.

What stresses has your accountant relieved you from? Leave it in the comments below.

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Signs Your Accountant is Good but Not Right for You

CPA Accountant Business Hiring Signs Right Fit

Finding the Right Accountant for You

The process of hiring a good accountant is something we discuss relatively often here on our blog because we are firm believers that a good accountant is essential to the growth of your business. While we frequently discuss how to hire a good accountant, many people often wonder how they can identify signs that an accountant may not be right for their company. It’s a lot like the concept of “one size fits all.” While it may seem ideal that every accountant work in the favor of your business, that’s not always the case.

Here are a few signs that you can identify that tell you that your accountant may be good but not right for you:

The Comparison Game

Many accountants may not do this intentionally, but unfortunately it happens. Accountants will discuss how quickly they were able to turn around another client’s finances and automatically believe they can do the same for you. Ideally, your accountant should want to see you win; however, constantly comparing your business situation to that of another could not only be unhealthy for you as a business owner but it could also have your accountant placing unrealistic expectations based on a previous experience.

No Experience in Your Industry

For the most part, skill sets can easily be transferred into another industry; however, if you’re really in a bad predicament financially, you may want to hire someone who has experience in your industry and is well versed in market trends. This not only can help you as your business grows but it will also guarantee that your accounting needs are in good hands.

Doesn’t Understand Your Vision

Your accountant does not have to agree 100% with your vision but they should at least understand your vision and where you stand as a business owner. This is essential not only to you as a business owner but also to the accountant. If they don’t understand your vision, they will have no ability to help you execute it and see that vision come to reality.

Have you ever had to let go of your accountant? What things let you know that the accountant wasn’t for you? Leave your comments below.

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Three Things Your CPA Can Help You Deduct at the End of the Year

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Tax Deductions

Tax season can be a very stressful time for both business owner and non-business owners. And one of most stressful things about tax season is the anxiety surrounding the deductions you may be able to claim. Here are four things your CPA can help you deduct from your taxes:

Health Insurance Premiums

Medical expenses have the potential to literally blow your bank account, and believe it or not, the IRS has compassion on American citizens as it relates to health insurance. In order to deduct medical expenses, health insurance premiums have to be more than ten percent of your adjusted gross income.

Charitable Gifts

Practically every taxpayer knows that making charitable gifts or donations can yield big rewards at the end of each year. Sadly, that’s why many taxpayers give as much as they do. While most taxpayers know about this benefit, it has been proven time and time again that many taxpayers actually aren’t taking full advantage of this benefit.

For example, money isn’t the only thing that can be deducted. If you make a donation of clothing to the Goodwill, or even if you bake cupcakes for a local charity, the monetary value of your clothes and also the monetary value of the ingredients for the cupcakes can both be deducted.

Babysitter

Have you recently had to pay for a babysitter so that you could go volunteer for a charity? There’s good news! Thanks to a law passed by the federal Tax Court, you can actually include the cost of your babysitter as a charitable contribution. All you have to do is document or prove that your babysitter was working at your home while you were volunteering.

What ways have you been able to deduct from you taxes thanks to your CPA? Leave your comments below.

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Five Benefits of Hiring a CPA

CPA Accountant Benefits Business Company Finance

Benefits of CPAs

Finding a CPA can be a very stressful endeavor. However, CPAs can confer a number of very substantial benefits to your company. Here are just a few ways your business could greatly benefit from hiring a CPA:

CPAs Can Help You Increase Your Budget

Have you often dreamed of having a bigger budget to do some of the things you have always dreamed of doing within your business? Hiring a CPA can help you do just that. A CPA is all about numbers and helping you cut cost, and the more you cut cost in one area, the more opportunities you have to increase your budget in others.

CPAs Can Help You Decrease Your Budget

Just like CPAs can help you increase your budget, they can also help you decrease your budget if that be your desire. This can be done by seeing where you spend unnecessary money and cut that spending in half.

CPAs Can Help You With Financial Management

Do you struggle with personal and business financial management? Don’t worry, you’re not alone. Many businesses struggle with this same thing, and if you can find a CPA who is versed in financial management, that adds an extra bonus not only to your life but to the lives of those on your business team.

CPAs Can Help You Determine When You Need To Cut Staff

Whether businesses like to do this or not, sometimes cuts are necessary, and when you’re so invested in your own company sometimes you’re blind to the areas that you need to cut. Your CPA has an inside look at your business, but can also view things from a different perspective.

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  • Huddleston Tax CPAs / Huddleston Tax CPAs – Bothell
    Certified Public Accountants Focused on Small Business
    19125 N Creek Parkway #120 / Bothell, WA 98011
    425-242-3836

    Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching,
    QuickBooks consulting, bookkeeping, payroll, offer in compromise debt relief, and business valuation services for small business.

    We serve: Tukwila, SeaTac, Renton. We have a few meeting locations. Call to meet John C. Huddleston, J.D., LL.M., CPA, Lance Hulbert, CPA, Grace Lee-Choi, CPA, Jennifer Zhou, CPA, or Jessica Chisholm, CPA. Member WSCPA.