This article is somewhat specific to the needs of freelancers who live in the United States, but I’ve tried to make it useful no matter your country.
I remember when taxes used to be relatively easy.
I’d get my paycheck, my employer would withhold estimated tax payments, and at the end of the year I’d file a relatively simple tax return and get a refund for any withholding overpayments I made a bit later.
And then I started my own business.
…And the IRS went from being a faceless organization that mailed me checks every year to an archnemesis, who I felt was always getting in the way of me, my clients, and even my ability to create jobs.
I dug myself into a hole more times than I’d care to admit, especially as I grew my agency and brought on employees and significant overhead. Early on, I thought of my taxes in a very laissez-faire way: “yeah, I’ll owe some taxes probably, but hopefully I’ll have the money to pay them. And if not, I’ll get a payment plan worked out. What’s the worst that can happen?”
To be honest, it wasn’t doom and gloom.
I did end up taking up the IRS on a payment plan, and it was easy to do. (If you owe less than $50,000, you can usually do this without even needing to talk to an agency. If you’re like me and don’t like needing to tell someone that you screwed up your taxes, that’s a very welcome featured.)
But don’t be like me and end up mucking around with IRS payment plans.
If you take one thing away from anything I do here at Double Your Freelancing, it’s this: Learn as much as you can from those who’ve already forged the trail.
So today I’d like to introduce you to Luke Frye of Timber, an accounting firm that specializes in working with freelancers. He’s helped me prepare this article (since I’m woefully ill-equipped to talk authoritatively about taxes or legal things), and his firm has also produced a really good email course that goes deeper than what we’re able to cover in this article—I’ll link you to that at the end of this article.