A Guide to Filing Your Taxes as an Independent Contractor

When it comes to who is an independent contractor, the IRS states that “the general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.”

Put another way, an independent contractor is somebody who gets paid on a “project by project” basis, whereby the employer pays to have a service or good delivered, but they only have a say in the final result and not how to process is carried out.

Depending on your business situation, it might make more sense to either file your taxes yourself or hire somebody for help. Here are some tips to help inform you on whether you should be flying solo or hiring some help.

Do it Yourself

If your freelancing/business operations are relatively straightforward and you don’t owe any outstanding taxes from the past, it might be a good idea to try tackling this process yourself.

Hire a Professional

Doing your independent contractor taxes yourself may save you a little bit of time in the short run, but if you happen to make a mistake or error in your filing, you could be subject to some hefty tax penalties.

When it comes to dealing with independent contractor taxes, the key is to start EARLY. Don’t wait until the last minute to start working on your taxes.

There are tons of bookkeeping providers out there that have automated solutions, making keeping track of everything easy for you.

Prioritize Book Keeping

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