It's Tax Time, Freelancers!

I slogged through two years of filing my own business taxes using online software as a freelancer. Now, I cringe at the money I could have saved — if I had only found our Business CPA sooner.

I am a recovering DIY tax filer. From the moment I had my first job, I would happily file my 1040EZ each year. As tax prep grew more complicated, I turned to the likes of TurboTax or TaxAct to run my annual taxes. It was even a little fun.

As a full-time employee, I still received a pretty nice refund. But then, I started working as a contractor and everything changed. Suddenly I owed. Surely switching over to the software’s “Freelancer” plan would help? But it was still agony.

I slogged through two years of filing my own business taxes using online software as a freelancer. Now, I cringe at the money I could have saved — if I had only found our Business CPA sooner.

A few years ago, we finally hired David. Now, he is one of my favorite people. I often say that he is our tax ninja or some sort of magician, but he’s really just wicked smart.

I don’t want to overly dramatize this – but handing over our taxes to David has been a game-changer. He’s saved us so much money — plus guided us through PPP madness, incorporating our company, and several other serious financial decisions.

That’s why one of my biggest tips to freelancers at any level is this: hire a business CPA.

Here are three things to consider along the way.

#1: Find the Right Person

Finding the right person starts with seeking out a CPA with expertise in the business arena. Ask your freelancing peers or even your neighbors for local recommendations. We found David through our financial planner.

The key of course is business expertise. You also want to make sure you click with them on a personal level. But more than anything, just make a choice. Don’t let the process of “finding the perfect CPA” slow you down. Just pick someone.

#2: Don’t Let the Cost (or Past Mistakes) Hold You Back

Hiring a business CPA will cost you. It will be more expensive than a standard CPA, and certainly pricier than doing it on your own. For comparison, we paid between $100-$250 to “do our taxes” before hiring our business CPA. Now, it costs roughly 3x more.

But the savings are immense. The financial benefit far outweighs the cost. Plus, it makes life easier. There’s also a level of security knowing that if we ever get audited, we have extra help.

PS - Remember, it's a deductible expense!

If you’ve made tax mistakes in the past, it might feel a little uncomfortable divulging those to a professional. Choosing someone with empathy helps overcome this barrier. No matter what, don’t let this discomfort (or even shame) hold you back. Life is so much easier once you clean up your prior messes and move forward with confidence.

#3: Put Your Money to Better Use

Once you hire a CPA, you will end up keeping more of your hard-earned money. There’s no fraud involved here, just smart business ownership.

Spoiler: We actually received a refund this year! Two years ago, I would never have believed that was possible as a freelancer.

What can you do with that money instead of sending it to the government?

· Support a small business by purchasing gifts at a local boutique.

· Infuse money into the local economy by taking your family out for a fun activity.

· Make a global impact by donating to an international cause.

· Support your community by giving to a shelter, food pantry, or other charity.

· Prepare for the future by funding a retirement or college fund.

The choices are endless. But it’s your choice. And, really, choice is what being a freelancer is all about.

So, I leave you with this: put hiring a business CPA on your Trello board or to-do list this year. You won’t regret it.