Paying taxes as an American Freelancer?
As an American freelancer, knowing how to pay your taxes isn’t always simple, especially if you reside in the United States. In this article, we offer you direction to try to answer all the questions you may be asking yourself about taxes and your freelance rights based on your legal status.
When you want to start a freelance business in the United States, you must always choose between two legal statuses: LLC or INC. To do so, it is important to understand the advantages and disadvantages of each status, which will then allow you to understand how to proceed paying your taxes.
LLC is a limited liability company that allows you to enjoy many benefits. You will be completely protected and your personal wealth will not be affected in case of a problem. The management of a LLC is extremely flexible which allows you to manage your business as you see fit. In addition, your taxes are paid directly on your personal income tax return, so everything is quite simple for you. This status is ideal for small businesses. Moreover, the tax is unique to it, which is a real advantage.
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When you opt for an INC status, it means that your company is significant in size, so you are not working alone, but are usually several associates. The main advantage is the fact that you can issue shares and attract investors, however it is important to note that you are subject to double taxation. To choose this status your turnover must truly be significant.
All that is deductible
You should know that in the United States you can deduct substantial savings on what you owe in taxes. Here are the charges you can deduct from your tax return:
Obviously, to avoid making mistakes in your tax return, it is crucial to keep an excellent record of accounts. To do so, you can use specialized billing software to help you and make it easier for you. Finding your annual turnover, your professional expenses, all this will could be a breeze, in just a few clicks. Obviously if you want to lighten up all this accounting, then you can call on an accountant, if your budget allows you.