Every year, more young adults (a.k.a those pesky millennials) are looking for new ways to approach work. Gone are the days of sticking with one company your entire life. Today, people tend to move around with their employers and, in some cases, not have an employer at all. Self-employment is on the rise and if you're one of these people, then you know all about the 1099 tax form. It's intimidating at first and potentially expensive but there are actually a few short cuts you can take that make tax season a lot easier on your wallet. So don't give up on your dream just yet. Follow these tips on how to avoid taxes (legally).
The question of "how to avoid taxes" is easier than you think. Is it illegal? Not at all. As a freelancer, you can deduct far more expenses than the normal employee can. Do you use the internet for your job? Write it off! What about your home office? You need it, so write it off! Do you drive to cafes to meet clients every day? Save those gas receipts and write them off! Now, this doesn't mean you get all these things for free but by writing them off on your tax form means you pay severely fewer taxes to the government.
Who knew avoiding taxes was so much work? Seriously though, a large step of our "how to avoid taxes" tutorial is your attention to detail. So grab your 1099-MISC document and scour through it with a fine tooth comb or whatever kind of comb you have available. Sometimes, your client might screw up and make your income look larger than it really was. Normally, that sounds like a good mistake but it's not. That just means you owe the government more taxes. No one wants to pay taxes on money they didn't truly earn so keep your eyes out for that.
Remember how we talked about writing off expenses earlier? Well, that still applies but your job will be a whole lot easier if you organize everything first. You don't want to reach back into the dank, dark corners of your mind pulling out random business expenses that are inaccurate. Instead, use an app like FreshBooks to collect and organize each receipt. Come tax time, all those business expenses are neatly on hand so you can prove to the government that you don't owe it any money. Avoiding taxes sounds like a criminal activity but really, it's just about being smart, organized and of course, frugal. Happy saving.