Instead of dealing with issues like accounting, taxes, investments, and insurance, you become a freelancer or content creator to free up more time for activities you enjoy. Regretfully, managing your finances well for both your personal and professional lives is a crucial aspect of being a freelancer.
As a freelancer and business owner, we understand the challenges of juggling your creative endeavors with maintaining client connections and all the other tasks required to operate a successful company.
It’s challenging. However, you may now steer clear of these financial hazards by hiring a tax accountant in Westchester County, NY. Now let’s examine which hazards they can assist in avoiding.
Table of Contents
Not Keeping Personal And Business Accounts Separate
Setting up distinct bank accounts for your freelance income and expenses and your personal income and expenses should be your first step if you get paid for your work, regardless of whether you are a full-time freelancer or you only take on tasks on the side.
You can open business bank accounts at any bank as long as you have your EIN number (similar to a social security number, but for a business) if you have established your freelance business as a legal business entity (such as a single-member LLC or S-Corp).
One of the first and most crucial things a freelancer should do is to register separate bank accounts for their personal and professional use. A tax accountant may assist with this. Accountants can also assist in keeping track of routine business expenses from your bank accounts, such as payroll, taxes, business permit fees, and many other things.
W9 collection and 1099 Issuance
Marketing partners and creators who work as freelancers or independent contractors are required to file W-9 forms with each business from which they receive payment. Although the majority of independent contractors have this form saved and completed, it is imperative that they present it to every business with which they have a contract. Additionally, the business needs to enter the contractor’s information into their system and obtain the W-9.
For the accounting and finance teams, accurately entering the data is typically a laborious manual operation. Additionally, businesses frequently fail to compare the contractor’s information with a Taxpayer Identification Match, or TIN.
It might take a lot of time as a marketing creator and partner to hire tax accountants to follow up with every client or employer to make sure you have all the paperwork you need.
Keep An Eye On The Money Coming In And Going Out
It is common for freelancers who have several clients to also have various bank accounts. Different payment options in different currencies may be needed by different clients.
It might be especially difficult to keep track of cash inflow when you have several clients paying you in various currencies on several platforms. You must convert those payments into your local currency and move them to a single business account for centralization in order to obtain a sense of your total earnings.
Employing an accountant will assist you in calculating the profits and losses associated with these foreign exchange conversion operations. They will also help you decide when it is most profitable to convert other currency payments to local currency.
Maintain a Record of Your Finances
It can be very difficult to keep track of not only your cash but also your entire financial status, particularly if you are not familiar with accounting or bookkeeping.
By using accountants, you may effectively manage your financial records using accounting software or basic Excel sheets. From your monthly profit net income to your entire net value, these financial records can assist you in evaluating the performance and financial health of your company.
Conclusion
Accountants are more than just math whizzes. They don’t compute and generate numbers in a mystical way. Accountants assist you in understanding your financial situation, evaluating your performance as a freelancer, and offering guidance on how to advance your career financially.
In and of itself, being a freelancer can be a daunting endeavor. An accountant will relieve you of a significant financial burden by keeping tabs on your money, business performance, and compliance with pertinent IRS rules and regulations.
References:
- https://www.refrens.com/grow/freelancers-hire-an-accountant/?srsltid=AfmBOoprlVVMOJzfZDsyJ4MR7Cy0TvLsRc4hGpZbI_o2cG0HPdReuZaU
- https://www.creatorbread.com/blog/5-financial-mistakes-freelancers-make-and-how-to-avoid-them
- https://www.lumanu.com/blog/tax-issues-influencers-face
- https://bethkobliner.com/advice_basics/taxes-freelancer-creative/
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