Taxes are hard. I saw a video once which talked about how weird our tax system is. If you went to a store, did your shopping, then got to the counter and the attendant said, “Thanks for coming in! If you could please now add up how much you owe us, then fill out this form with confusing legal jargon and submit it, we’ll get you squared away! Oh, also, if you mess up, we’ll throw you in prison for a long time!”, you’d just leave…because that’s stupid…
But that’s just how the government rolls!
At least, that’s how the US government rolls! (Not sure how things work in other countries, but I live here, so it doesn’t really apply to me)
But I digress. Point is, I gotta pay taxes, and taxes are hard. I got hit hard a year or two ago because I did some contract labor, but didn’t know I was supposed to set anything aside for taxes. So, when it came time to pay up, I got hit with a really hefty bill. Thankfully, I was already getting a pretty good return from my other job, so the lesson wasn’t as crippling as it could have been, but it was a lesson learned all the same.
When I started researching freelancing, one of the first things I looked into was how taxes worked. Since it’s pretty much the same as any contract labor, the rule of thumb is withhold 25% from whatever you make. Most freelancer blogs I read pretty much end there, with maybe a mention about deductable expenses.
But the Electricians…they know what’s up.
Well, maybe they do. This dude I watched explained business accounts and cards, charging deductable expenses to your business card, money transfers, it sounded pretty legit!
Now, I’d want to run his advice through a CPA before doing it, but that’s so far off my radar at the moment. First I gotta start making an actual income!
Anyways, sorry for writing an entire post about taxes. I was interested in it and found what I discovered to be interesting enough, so I figured there had to be at least one other person out there who would as well.
I’ll try to link the video I mentioned later. WordPress mobile is being a pain in the butt.