How to Start a Home-based Editorial Services Business by Barbara Fuller

Author:Barbara Fuller
Language: eng
Format: epub
ISBN: 9780762795307
Publisher: Globe Pequot

Form 1040-ES

Advice from a Freelancer

“Pay your estimated taxes to avoid owing a large sum to the IRS on April 15. In fact, every time you get paid for work, transfer 20 percent of that payment to a separate bank account for taxes. That money isn’t yours to spend.”—Brian Jones, Freelance Editor

The next step, after you estimate taxes owed, is to make sure you have enough money to pay those taxes when they are due. Without cash in the bank, you might find yourself waiting anxiously for a late payment from a client as tax day approaches. The IRS will not forgive you even if your last job did fall through—and even if that last job was for a government client delinquent in pay to you. Taxes are due when they are due. Two good ways to prepare yourself are to (1) divide the total you expect to owe for the year by twelve and put at least that amount in a separate savings account each month or (2) set aside a certain percentage of each check received—maybe 20 percent or more, depending on your individual situation and the advice of your accountant if you have one. After you set aside the money, pretend you don’t have it until you submit it to the government.

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