First, let’s discuss these two simple tax tips. Then, we’ll cover the recommended tax software.
USE A SEPARATE ACCOUNT TO PAY YOUR TAXES
One of the simplest decisions you can make for your business is to setup a separate tax savings account. For most banks, if you have a checking account already, you can just call and open a savings account up over the phone.
As a small business owner, I get it, it’s nice to have everything draw from one account. But when it’s time to sift through and tally everything up come tax time, things can get messy. Spare yourself the headache. Make estimated tax payments straight from a separate account.
USE APPS TO AUTOMATE TAX SAVINGS.
This is another one of those simple decisions you’ll be kicking yourself for not having thought of sooner. Use apps like Digit or Acorns. You can setup up recurring withdrawals weekly, bi-weekly or whenever you get paid. And these recurring withdrawals should go straight to your tax savings account. Name all the accounts something simple (i.e., “income tax”) so you aren’t scrambling every April or every quarter.
Now onto the software side of things.
BEST TAX SOFTWARE FOR FREELANCERS.
If you file a Schedule C or 1040, TaxSlayer is a great option. There’s a few reasons TaxSlayer is the best tax software for freelancers. Unlike TurboTax — and more on them in a bit — you don’t have to pay $200 for all your filings or pay additional money for support.
The functionality is similar, but it’s just $47 at the federal level, an additional $29 at the state tax filing, and they have representatives available 24/7 to walk you through questions, via phone, email or live chat. Customer service is where they really shine, considering that, as a freelancer, taxes are often the last thing on your mind — until it’s time to do them, at least! But if you’re disciplined about adhering to those first two tips above, and use a service like this, you won’t have anything to scramble about.
BEST TAX SOFTWARE FOR SMALL BUSINESSES.
TurboTax was started in 2001, eons ago in internet years — who remembers buying the those TurboTax CDs? Although TurboTax Business might be overkill for an independent freelancer, it’s a great option for a growing small business.
For instance, if you use QuickBooks, Intuit allows you to import all of that data directly. You can also TurboTax Business to manage taxes for LLCs, C-corporations, S-corporations, estates and other company structures.
While most of the so-called “best tax software for small businesses” focus on filing by April 15, with TurboTax Business you can file quarterly, pay estimated taxes and even submit returns to individual states where you may owe.
The biggest downside with this? Cost. It’s $169.99 and you have to pay $24.99 for each state tax return you file, plus, should you require a tax professional to assist, you’ll have to fork up an additional payment. But given how robust the software suite is, it may be worth the cost.
Call Scott A. Kunkel, CPA PC today in North Richland Hills at 817-498-1040 to have a chat about ways to save money on your taxes.
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