Basic Tax Tips for SharePoint Freelancers

by , Posted August 22, 2013 - 18:33

Tax

Attention Freelancers: Keep Uncle Sam Off of Your Back

Written by: Brett Harris

Freelance work in the SharePoint industry is a heady experience. You have the freedom to not only can you do what you want, when you want, but you don’t have to answer to anyone but yourself. One of the first questions that SharePoint freelancers have is, “What about my taxes?” Taxes can be confusing enough for people who work for an employer; work for yourself and taxes can be downright overwhelming. Here are a few things that you need to know:

1.Organize Yourself

Though you will only receive a 1099 form from clients on SharePoint projects that you have earned more than $600 from, you are still required to report every penny that you earn. Make sure that you keep excellent records of all of your transactions. The easiest way to do this is with a Microsoft Excel spreadsheet or accounting software.

Keep receipts of business expenses or, if easier, a separate spreadsheet that details them. Things like promotion materials, office supplies and business meals are tax deductible. Keep proof of these transactions. You won’t need to send receipts in with your tax filings, but you will need proof if you are chosen for an audit.

2.Start Saving

Once you start making real money delivering SharePoint projects , you’ll start owing Uncle Sam. Though your situation may vary from someone else’s, it’s safe to assume that you’ll owe about 15 percent of every dollar that you earn. Start a savings account, and put away 15 percent of every check that you receive for your work. That means that for every $100, you will put away $15, keeping $85 for yourself.

The IRS allows you to send in quarterly estimated taxes. Set aside 15 percent from every check and send in the money you have put away on the 15th of every April, June, September and January. This saves you from a huge shock come tax time.

Tax Return - 1040

3.Common Forms

Unless you have special circumstances, you will use these forms for all of your SharePoint consulting efforts: W-9, 1099, 1044 and Schedule C. The forms and their instructions are easy to find on the IRS website. For more complex circumstances, you may need Schedule C, Schedule SE, Schedule D and Form 8949. If you have any question as to which forms you will need to file to stay within the letter of the law, consult a professional accountant or tax preparer.

4.Deductions

Not every SharePoint freelancer will be able to claim the same deductions so pay attention to what you can claim. Typically acceptable deductions are those expenses that help your run your business, health insurance, your home office and office equipment. The worst thing that you can do when taking deductions is to fudge your numbers. Some deductions only allow you to claim 50 percent of totals; be sure to know the rules before you attempt to deduct any expense.

Filing taxes as a SharePoint freelancer is different than filing as a typical working employee. Do your research and ask for help when you need it. The IRS is full of advice and instruction; they would much rather help you than hurt you.

Writer Brett Harris is an avid finance writer. Click here to read more about Top Online Accounting Degree Programs where you can learn more about financing and business.

Post By Shadeed Eleazer (50 Posts)

Shadeed Eleazer is a Principal Consultant and founder of Managed Path Solutions, a Microsoft SharePoint post-deployment specialist firm. He is the President of the Baltimore SharePoint User Group. Tweet him @mrshadeed to discuss this article and other collaboration topics.

Website: → The Online Home of Shadeed Eleazer

Connect

Related posts:

  1. Technical Phone Screen Tips To Land Your Next SharePoint Job
  2. 5 Tips to Enhance Your SharePoint Resume in 2011

898 total views, 1 today

Tags: ,