Whether you are in the US or not, most countries, states and cities have a tax code you have to follow.
As freelancers, we are responsible for putting money aside for those taxes.
One of the other things I realized is that, while the P&L statement gives a quick overview of “money in” and “money out” for the month and year, it doesn’t break down the amounts very well.
That’s not cool. How do you track client invoices? How do you know whether to expect a 1099 from a client? And what if that client pays you through PayPal?
Did you know in the US at least, that PayPal also reports all earnings you receive through them to the IRS. That may mean double or triple reporting for freelancers.
I’m certainly no accountant, but I’d like to set up something to track this information. I’m definitely opposed to paying more than I need to pay in taxes, even if I can get it back as a refund when I file.
This short video was informative when it comes to the very basics of setting up and tracking freelance income but …
I’m also on the lookout for an accountant willing to have a discussion about what’s happening for people in the US, which of course I’ll record. More details on that to come.