The income on each 1099 is reported to the IRS, meaning any discrepancy on your tax return is likely to raise some red flags. You many not have considered this, but requesting your own EIN or Employer ID Number can greatly benefit you. Instead of just being a “contractor for hire,” becoming your own business provides many tax breaks that you wouldn’t receive otherwise. Although customer service reviews are mostly positive, some FreshBooks users report that they’ve been double charged, and customer support is not always responsive to these issues. Third-party customer reviews point to significant problems reaching customer service and getting resolutions to their problems. → Any income you received or earned is not considered salary or wages.
As an independent contractor, you are responsible for paying quarterly income taxes–which can be an arduous process if you don’t know what you’re doing. Having an accounting system in place will increase productivity and help your business run efficiently. Independent Contractor Tax Advisors is a licensed CPA firm that provides accounting services and tax advice for contractors, consultants and other self-employed clients across the U.S. Our clients love us because we simplify their lives and put more money in their pockets.
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There are a lot of business expenses that independent contractors need to keep track of in order to pay the least possible income tax. Our professionals advise independent contractors on accounting best practices that save time and money. Staying on top of your accounting will save you a lot of time, effort and money in the long run. Finding and utilizing the programs that meet your needs will help make you a successful indepedent contractor. Meanwhile in relevance to the financial aspect, when it comes to employees, the company is obligated to withhold the income tax, social security and Medicare taxes from the wages being paid.
Whether you’re a business owner with multiple team members or are a sole proprietor, we specialize in servicing independent contractors with all of your accounting needs. We chose QuickBooks because we believe it has the most features, ease-of-use, and pricing that most independent contractors will need. But every contractor is different, so one of the other accounting apps on our list may fit your needs better. Paid add-on services include online ACH and credit card processing and payroll.
Our Methods To Independent Contractor Accounting
In addition, keeping your books organized will put you in better position if you ever apply for a business loan. Whether you’re a part-time independent contractor or growing your enterprise, you’ll need to manage your finances, and that means seeking out an accounting accountant for independent contractor app. Even Quickbooks requires you to use TurboTax for an extra fee if you want your taxes done in the same place. It is the most expensive service on this list, but includes everything you need to run your basic business administration without lifting a finger.
What are the duties of a contract accountant?
- Prepare and analyze monthly and quarterly manufacturing review packages.
- Review and analyze manufacturing variances and operating expenses.
- Reconcile monthly inventory balances and perform month end closing and reporting.
- Assist in annual budgeting and quarterly forecasting.
If your part-time business generates more than 1,000 invoices a year, you’ll need to upgrade. But even the Standard version, priced at just $15 per month billed annually, which offers up to 5,000 invoices a year should be enough for most part-timers. We reviewed accounting apps on a variety of platforms, for mobile devices and desktop computers alike, so you can assess which features meet your needs as an independent contractor. LYFE Accounting has extensive experience in servicing independent contractors. We manage books, file tax returns and project and budget future sales and expenses.
Accounting Tips: Managing Your Independent Contractors
If you’re a freelancer and want simple accounting with a focus on your needs, FreshBooks is a solid choice. If you have more than five clients, you’ll need the Plus version, but all of the plan tiers are reasonably priced. Independent contractors can be an asset to your company if used effectively. Quite a few business owners run into problems when they treat contractors as employees. Knowing the guidelines and maintaining the rules of independence are the keys to ensuring mutual understanding. → As an independent contractor, you receive 1099s at the beginning of the year for the previous calendar year.
