Are you thinking about next year’s taxes? If you’re an independent contractor, you should be. It’s never too early to get your tax documents organized and ready for filing, especially if paying estimated quarterly taxes is something you want to consider.
As more Americans seek autonomy from freelancing, often turning side hustles into second or third careers, it’s essential to consider the tax realities when transitioning from a W-2 employee to an independent contractor.
Freelancing offers autonomy, flexibility, and more growth opportunities than the traditional 9 to 5 work model. As a result, 59 million Americans freelanced last year, representing 36% of the workforce.
“Treat bookkeeping and accounting as a weekly habit, not something you do at tax time,” encourages Marina Vaamonde, the owner and founder of HouseCashin. She recommends paying quarterly taxes. “This helps you maintain a more stable cash flow throughout the year,”
Staying organized is vital. “One way to organize your tax materials is to create folders for each type of tax,” Noah tells Play Louder. “This way, you will have an easy way to locate the documents that relate to your specific taxes.”
No one wants to file their taxes, but staying organized from the start of the year can make your life a lot less stressful at the end of the year, whether you’re paying altogether or paying quarterly taxes.