Pursue your passion. Set your own hours. Come and go (mostly) as you please. What’s not to love about working as an independent contractor?
Despite its advantages, freelancing also comes with a unique set of challenges. In exchange for the flexibility and autonomy of contracting,
the Internal Revenue Service holds contractors accountable for recording, preparing, and submitting detailed income and tax information. Several aspects of tax preparation for contractors differ from those of traditional employees. If you’ve ever found yourself stumped by Form 1040EZ, you may find that Forms W-9 and 1099-MISC are just as foreign, if not more so. Bellingham, MA accountant Ann Irons, CPA discusses the most notable differences.
Four Quarters, Four Tax Returns
Most taxpayers would agree that an April 15th filing deadline is stressful enough as it is, yet an independent contractor is required to file quarterly taxes in January, April, June, and September. That’s four opportunities to make serious errors on your return—a scary thought, given the possibility of legal and financial penalties for doing so. Excellent record-keeping is essential to the accuracy and timeliness of your returns. If you feel that you are unable to devote enough time to organizing and filing your quarterly returns, it’s time to consider enlisting the services of a professional tax preparer.
No More Employer Hand-Holding
Traditional employees often take it for granted that their employer will handle all deductions and taxes from each paycheck, a convenience not afforded by contract work. This means you will no longer have access to the knowledge and expertise of a human resources department, and it explains why so many contractors have turned to professional CPAs and tax preparers in Bellingham, MA. Remember, you alone will be held accountable. Because you are not an employee, the entity for whom you complete work has no obligation to assist you in these matters.
Tax Returns for Non-Citizen Contractors
If you are a non-citizen performing contract work in the United States, special rules and forms apply. Compared to filing as a citizen—as an employee or a contractor—the process of preparing and filing an international tax return is significantly more complicated. Your right to live and work within the U.S. is contingent upon your timeliness, accuracy, and transparency in filing your tax return.
Other Considerations for Freelance Workers
Irons, whose diverse clients include individuals, entrepreneurs, contractors, and corporations, emphasizes the importance of two-way communication. When you meet with our team, we will address all of your concerns and questions, including:
- Have I claimed all appropriate deductions for which I qualify?
- Should I continue to file as a contractor, or should I incorporate?
- How organized are my financial records? How can I improve?
- How will recent changes affect future tax returns?
Even though you value your independence as a contract worker, understand that seeking professional guidance in financial matters is the responsible thing to do. We can help.
Need help filing your 1099? To learn more about filing taxes as a Bellingham, MA contractor, or to request a meeting with Ann Irons, CPA, LLC, contact our tax and accounting office at 508-966-0700. We offer bookkeeping, payroll, tax preparation, and financial services for individuals and businesses in Bellingham, Boston, Milford, Medway, Woonsocket, and the surrounding areas, and tax services nationwide.
Ann spent over 25 years in the financial service industry, gaining knowledge and experience that allows her to provide an array of tax, bookkeeping, and accounting services for her clients. Relying on a stringent code of ethics and a dedication to maintaining the highest industry standards, Ann works hard to ensure her clients receive the quality service they’ve come to expect. A member of AICPA and MSCPA, Ann has also had an article featured in the renowned publication, Banker and Tradesman. 
