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1.Set the dates for your freelance tax deadlines. To avoid fines, penalties, and last-minute panic it’s key to know when you have tax obligations throughout the year. Here are the federal tax deadlines for 2023 that every tax pro should be aware of. You should also make note of any state or local deadlines you have for estimated or other taxes. January April
October 2. tax due dates on your calendar, you will be ready to start looking at the documents you need to fulfill the filing requirements. This is where the challenge lies for many freelancers. Keeping track of all of your expenses and the supporting documentation (real receipts, not just a credit card statement) can be challenging. However, there’s a whole army of apps you can use to get the job done efficiently. The most important thing is to ensure that you have a system for consistently collecting and tracking your expenses and the taxes that you pay as the year progresses. 3. Select the right apps to automate your freelance expense tracking. There are many apps out there which can help you track your expenses, deductions, and tax payments. This is a short list of some of the most popular apps that can help you make sure that you have the updated info you need. Mint can help you track and categorize your spending. If you use Mint regularly, you can collect all of the data you need for tax filing including itemized deduction categories like medical expenses and charitable gifts. You can link Mint to several financial accounts, making it a convenient way to compile a complete picture of your yearly spending. Best of all you can use Mint for free on your iPhone or Android device, as long as you don’t mind a few ads, although there is also a paid premium version which eliminates those. FileThis is a secure tool that can help you abide by the IRS requirement that you provide actual receipt for any deductions you are claiming for your business. FileThis acts as an electronic filing cabinet where you can upload and categorize bank statements, receipt, and utility bills. You can add up to three years of these items and you can also create bill reminders for tax due to help keep you on track. Another perk of FileThis? You can send items to other accounts such as Dropbox, Google Drive or Evernote. Like Mint, there is a paid and unpaid version. MileIQ is a must for tracking mileage that you want to deduct from your freelance taxes.In order to take the mileage deduction, you will need to track where you drove and when. MileIQ allows you to automate this requirement by sensing when you are driving in a vehicle. The app tracks the route, including start and stop times, destination, and other data required by the IRS for a business mileage deduction. The app is free for up to 40 drives.
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If your freelance business received an Economic Injury Disaster Loan (EIDL) during the COVID pandemic, it will soon be time to start paying it back, given that The U.S. Small Business Administration’s (SBA) extended 30-month deferment period is coming to a close. Under the SBA’s existing deferment program loan payments were deferred for up to 30 months from the loan inception under the COVID Economic Injury Disaster Loan (EIDL) program. To help small businesses and freelancers who are still struggling financially, the SBA announced a Hardship Accommodation Plan in March of 2022 which provided the option of paying just 10% of monthly payments or $25 for up to six months. The Hardship Accommodation Plan is available if you meet certain conditions and enroll in it 60 calendar days before your first EIDL payment due date. The instructions from the SBA are as follows: ● If your loan amount is less than or equal to $200,000: To enroll in theHardship Accommodation Plan, create a CAFS account or log in to yourexisting account. Within CAFS, hover over "Borrower" and select "BorrowerSearch." Select the appropriate loan number and request the Hardship Accommodation on the Loan Info page. ● If your loan amount exceeds $200,000: To apply, contact the COVID-19 EIDLServicing Center at 833-853-5638 or [email protected] (andinclude “Hardship Accommodation Plan” in the subject line). You will becontacted by a loan specialist regarding requirements. Some important caveats about the EIDL deferment: ● It does not apply to non-COVID disaster home and business loans. ● It is effective for all COVID-19 EIDL loans approved in calendar years 2020,2021, and 2022. ● Interest will continue to accrue on the loans during deferment and may result in ● You can make partial or full payments during the deferment period but are not required to. ● The SBA recommends using www.pay.gov to make your payments and will only ● When the deferment period ends, COVID-EIDL Borrowers will be required to
via Freelancers Union Blog https://blog.freelancersunion.org/2022/12/21/hardship-accommodation-plan-for-economic-injury-disaster-loans-may-help-your-freelance-business-cash-flow/
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Wondering what’s changed in the tax world from last year? We put together the top six 2022 federal tax changes that taxpayers like you should know about before filing your income tax return in 2023. Tax year 2021 saw major tax changes due to the coronavirus pandemic, but many of those changes went away in 2022. Let’s look at the main events and how they might impact your tax refund this year. 1. Temporary Child Tax Credit increase from last year has expiredThe Child Tax Credit (CTC) saw some enhancements last year, including half the credit amount paid to parents in advance monthly payments and an increase to the credit amount itself. These changes were temporary and have not been extended through tax year 2022. Take a look at the table below to compare last year’s enhanced CTC with this year’s.
2. Changes to the Earned Income CreditThe Earned Income Tax Credit (EITC) saw several critical changes in 2021 that no longer apply in 2022. The amount you receive depends on your income level, filing status, and the number of children you have. Working childless adults can still qualify for this credit, but the age requirement and credit amounts have changed. Have a look at the table below to compare this year’s EITC requirements to last year’s.
For more detailed information about the EITC and to estimate how much you can claim this tax year, check out our Earned Income Tax Credit calculator. 3. Other COVID-19 tax enhancements
4. More people will be receiving Form 1099-KIf you sell items online (Facebook Marketplace, eBay, Etsy, etc.) or use third-party payment apps like Venmo, PayPal, or Square, you may receive a new tax form this year — Form 1099-K. This form records transactions from credit cards and third-party payment networks. Once you hit a certain transaction threshold, you’ll receive a 1099-K from the company (Venmo, Square, etc.). Previously, you had to have made at least 200 transactions totaling at least $20,000 to receive a 1099-K. However, that threshold has dropped for 2022 — now you’ll receive a 1099-K if you made at least $600 in payment transactions through these third-party apps. There’s also no transaction limit, so you’ll receive a 1099-K even if you only received one payment totaling at least $600. Please know that this does not necessarily mean you’ll be paying taxes on every transaction recorded on your 1099-K. You’ll only need to pay taxes on any profits you make. For instance, if you bought an item for $150 and then sold it in 2022 for $200, you’d need to report the $50 profit you made. This kind of income has always been taxable income, but not many people have reported all their taxable transactions, which is what brought about this change. If you have more questions, check out Why Did I Receive a 1099-K?. 4. Changes to tax bracket income rangesThe income tax rates did not change for 2022, but the income ranges widened slightly due to inflation adjustments. Here are the tax brackets for 2022:
5. Standard deduction increaseThe Internal Revenue Service (IRS) also increased the standard deduction amount for 2022. The standard deduction is an automatic deduction all filers can take (unless you choose to take itemized deductions). Here are the new 2022 standard deduction amounts:
For more information on all of the 2022 tax adjustments due to inflation, you can check out the IRS’s detailed article about it. 6. Retirement account and health savings account contribution limitsThe IRS also announced changes for tax-advantaged accounts such as retirement plans and health savings accounts (HSAs) this year. If you have a 401(k), you can contribute up to $20,500 for 2022, a $1,000 increase from last year. Those with an HSA can also contribute more this year. The annual contribution limit for individuals increased to $3,650 for 2022 ($50 increase). If you have a family plan, the annual contribution limit is now $7,300 ($100 increase). Other notable changesSome other changes to keep in mind include the following:
What HASN’T changed for 2022?Sometimes it’s also helpful to review what tax laws have stayed the same compared to last year, so we’ve covered a few topics you might be wondering about.
Keep tax changes for the 2022 tax year in mindDue to the pandemic, the 2021 tax code changed in many ways. Most COVID-related enhancements have expired for 2022, and several tax breaks from last year no longer apply. Not to mention, we’ve seen a significant jump in inflation this year, which led to additional tax adjustments. Make sure to review this year’s tax changes to avoid unpleasant surprises when filing your federal tax return this season! This article is for informational purposes only and not legal or financial advice.via Freelancers Union Blog https://blog.freelancersunion.org/2022/12/20/top-6-tax-changes-you-should-know-about-for-2022/
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Then there are also things outside of your control, like global catastrophes and economic crashes or recessions that force markets to shrink and retreat until it has all blown over. If you work as a freelancer or are self-employed in an industry that is prone to slowing during tough times, it can be a double hit. But, just because things are difficult doesn’t mean freelancers should give up and seek alternative employment means, and there can be financial benefits to being a freelancer during a recession. Read on to find out how freelancers can prosper in difficult markets with these essential steps for attracting new clients when times are tougher. 1. Don’t neglect freelance job sites
While some freelancers prefer to win their clients via alternate means, freelance gig sites are a great way to pick up extra business during tough times. Perhaps you have lost a client or two in the short term as they have cut back their third-party spending and you need some quick wins to help balance the books. When your preferred client-winning methods are slowing down you can prop up your income with access to a host of potential jobs through sites like Upwork, Fiverr, and Flexjobs. Some sites allow potential clients to find you while others let you pitch your talents for specific tasks. However, it’s also important to understand that most freelance job sites will take a cut of your fee, so make sure to understand what that is and adjust your pricing accordingly. Social media is a powerful tool for businesses of all sizes and levels in today’s commercial landscape. And, whether you love or hate social media, your customers and clients are using it. Social media can be a fantastic tool for engaging with customers, building your brand, and bringing your business to the attention of more people. The best way to start using social media if you have avoided it so far is to start building a network and connections with people and brands you wish to work with. LinkedIn and Twitter are great places to start, and the more you start putting yourself out there, the sooner you will get noticed by the right people. Often, when companies are looking for freelancers to work with they will reach out via social media first, so it’s an excellent opportunity to get the gig before anyone else does. Ultimately, social media is free advertising both for you as a freelancer and for companies looking for third-party help, so 3. Network to yield better results
Traditional networking methods can still pay dividends for self-employed people and freelancers. For us to enjoy success as a freelancer, we need to work with people and there are several ways we can make connections. Social media once again becomes a useful tool through Facebook Groups or Meet-ups and events focused on your skills and industry. There are also shared working spaces that are typically well-populated by fellow freelancers. You can find work opportunities, form partnerships, and start building your network to ensure you have many avenues for work – essential for when times get tough. LinkedIn’s main purpose is for professionals to create networks so ensure you make use of this widely accepted platform to avoid missing out on jobs that you would be perfect for. The connections you make could turn into referrals in the future, validating your claims and experience and showcasing your history of working with established organizations. 4. Plan ahead and continue charging a fair rate
When it feels as though your work is drying up due to outside factors such as the economy, the temptation can be to drop your prices to try and entice more clients. But, dropping your price not only puts you under pressure, and makes you have to work faster for the same money, but it can send the wrong message to your clients. Those clients who you charge your previous rate to may see you are offering your services for cheaper and request the same fee for themselves. This just means you will have to keep working longer and harder for the same pay. It’s important to charge a fair price for your skill and experience, making significant cuts isn’t going to help you in the long run. At the end of the day, quality work is quality work and it’s worth it. If the threat of a recession looms there are ways to safeguard your salary, and if you have acquired a new client, planning your rates is always sensible. Many freelancers have a constant struggle with deciding what their rates should be, and it is difficult to place yourself in a vast and varied market. Ultimately, you must set a price that you can live by. 5. Sharpen your writing skills
While writing might not be your forte, it’s important to set yourself apart from the competition by presenting the best possible version of yourself to potential clients. You want to present yourself well when pitching to clients and in your portfolio, so it’s important to review the content you are putting out there. Writing help tools like Grammarly are freely available and do a decent job of pointing out any glaring errors in your writing. However, they aren’t perfect and you may wish to hire a (freelance) writer or proofreader to polish up your final drafts. 6. Tailor each pitch to the client
Whether writing is your strong suit or not, each pitch you send to a potential client must be given a bespoke flavor. Templated pitches are useful for sending en-mass but a more personal approach is better, particularly as people can tell when they have received a one-size-fits-all communication. Consider that companies are approached by freelancers quite regularly so they will want to see pitches that mean something to them. Treat your pitches like job applications, changing the content to match the task description, and mentioning the client or their company are a must. When times are hard you want to show that you go above and beyond to a client but if you can’t create a unique pitch for them then they may doubt your willingness to put the effort into their work. It is also essential to maintain your portfolio, adding your latest pieces of work when there is something you think is worth shouting about. For example, working with an industry-leading client, or creating something memorable. Your portfolio should be fresh and where possible should mostly feature work you have completed in the past six to 12 months. via Freelancers Union Blog https://blog.freelancersunion.org/2022/12/15/6-essential-steps-to-win-clients-in-a-difficult-market/
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Just Because Ye Eats Free at Mar-a-Lago, Doesn’t Mean he can Also Eat Free Off the Plates of Freelancers. The infamous Kanye West is about to find out that freelancers are not to be messed with. As covered in Business Insider, on December 7, 2022, New York-based creative director, Katelyn Mooney filed a complaint against Kanye West’s Yeezy brand, claiming she is owed $95,000. The mother of three was promised $110,000 for work she carried out but has only been paid $15,000, despite performing the work and agreeing to that sum. "This abuse of an independent freelancer was the exact type of exploitative conduct Freelance Isn't Free Act (FIFA) was enacted to address."- says the lawsuit The suit cites NYC’s landmark Freelance Isn’t Free Act (FIFA), which gives independent workers the right to a written contract, timely and full payment and protection from retaliation. The law establishes penalties for violations of these rights, including statutory damages, double damages, injunctive relief, and attorneys’ fees and costs if a freelancer’s case goes to small claims court and wins. We continue to see the real-world consequences of NYC’s groundbreaking Freelance Isn’t Free Law that has protected over 2,000 freelancers and recovered over $2 million in owed compensation for their work in New York City. That is why we urge NY Governor Kathy Hochul to sign the statewide bill, which was passed by both houses of the legislature and has just made it onto her desk today. Freelancers Union will not stop until we bring this law to every state because we know while Ye is a high-profile example, 70% of freelancers have faced issues with non-payment. We look forward to holding Ye to account in New York and fighting for freelancers everywhere. The Freelancers Union is excited to bring Freelance Isn't Free to every city and ultimately, federally and stop the Ye's and bad actors of the world. via Freelancers Union Blog https://blog.freelancersunion.org/2022/12/14/pay-up-ye/
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There’s nothing wrong with filing taxes early. In fact, getting a head start on federal tax filing may be more beneficial than most people realize. Officially, it doesn’t matter how early taxpayers file their tax return if you meet the IRS original or extended tax deadline. For tax year 2022, Tax Day is April 18, 2023. But even though it’s not required, it’s almost always more beneficial to file your taxes early. Here are some top reasons why. 1. You’ll get your tax refund faster.If you want your tax refund in your bank account as soon as possible, it’s good practice to file early. Getting a jumpstart on filing your tax return means you will be one of the first in line to receive your tax refund. Choosing to e-file and receive your refund via direct deposit is the fastest way to receive your money once the IRS starts processing returns. When the government owes you money, you might as well get it as soon as you can, right? The sooner that cash is in your pocket, the more time you have to make good use of it! For instance, you could put that extra tax refund money toward paying off a credit card bill, saving you the need to continue paying interest on outstanding debt. 2. You’ll have more time to get organized.Let’s face it, most of us aren’t as organized as we would like to be when it comes to filing our taxes. The nice thing about online tax software is you can start filing your federal and state returns early, and then continue updating them as you receive the necessary tax forms like your W-2 or 1099s. As an example, let’s say you wait to file your federal income tax return until the last minute. In the middle of filing, you realize you are missing some essential forms, and now you’re running out of time to find the paperwork you need. Similarly, the longer you wait to file, the harder it is to remember which tax-deductible expenses and potential tax credits you could claim throughout the year. If you didn’t keep adequate records, it can be difficult to recall what happened over a year ago. It’s best to file early while the previous year is still fresh in your mind — especially if you are someone who needs to record itemized deductions. Giving yourself that extra time to file helps you avoid the need to file a tax extension and gives you a better chance at filing a more complete tax return (which could possibly lead to a bigger tax refund!). If you find yourself owing money to the IRS, filing your return early gives you more time to pay your tax bill. You have until the tax deadline (April 18, 2023) to pay the amount due. If you’re on a tight budget and are expecting a tax bill, filing early gives you more time to plan for that payment so you don’t end up owing late penalties and interest on any outstanding tax debt. It’s also worth noting the IRS offers a variety of different repayment options for American families who cannot afford to pay their full tax balance out of pocket. If needed, filers can apply for a payment plan with the IRS but will likely still have to pay late fees. File as early as you can to allow time to budget for a potential bill. 4. You’ll lessen your chances of tax fraud.Unfortunately, tax fraud is a common form of identity theft. If someone gets ahold of your Social Security number, they have everything they need to file a federal tax return in your name with the intent to steal your tax refund. Filing your taxes early lessens the odds of tax fraud. The quicker you file your return with the IRS, the less time a criminal has to file a fake tax return in your name. When can I start filing taxes for 2022?You can e-file your tax return online with TaxAct as early as Jan. 3. However, the IRS will not officially start accepting and processing income tax returns until Jan. 24, 2023. Main takeawaysWhile the IRS is making better progress than last year, the department is still dealing with a backlog of prior year tax returns waiting to be processed. The large majority of those waiting to be processed are paper filed returns, which makes e-filing your return this year even more important if you want to receive your refund in a timely fashion. via Freelancers Union Blog https://blog.freelancersunion.org/2022/12/13/4-benefits-to-filing-taxes-early/
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The Internal Revenue Service today encouraged taxpayers to take simple steps before the end of the year to make filing their 2022 federal tax return easier. With a little advance preparation, a preview of tax changes and convenient online tools, taxpayers can approach the upcoming tax season with confidence. Filers can visit the Get Ready webpage to find guidance on what’s new and what to consider when filing a 2022 tax return. They can also find helpful information on organizing tax records and a list of online tools and resources. Get Ready by gathering tax recordsWhen filers have all their tax documentation gathered and organized, they’re in the best position to file an accurate return and avoid processing or refund delays or receiving IRS letters. Now’s a good time for taxpayers to consider financial transactions that occurred in 2022, if they’re taxable and how they should be reported. The IRS encourages taxpayers to develop an electronic or paper recordkeeping system to store tax-related information in one place for easy access. Taxpayers should keep copies of filed tax returns and their supporting documents for at least three years. Before January, taxpayers should confirm that their employer, bank and other payers have their current mailing address and email address to ensure they receive their year-end financial statements. Typically, year-end forms start arriving by mail or are available online in mid-to-late January. Taxpayers should carefully review each income statement for accuracy and contact the issuer to correct information that needs to be updated. Get Ready for what’s new for Tax Year 2022With the end of the year approaching, time is running out to take advantage of the Tax Withholding Estimator. This online tool is designed to help taxpayers determine the right amount of tax to have withheld from their paycheck. Some people may have life changes like getting married or divorced, welcoming a child or taking on a second job. Other taxpayers may need to consider estimated tax payments due to non-wage income from unemployment, self-employment, annuity income or even digital assets. The last quarterly payment for 2022 is due on January 17, 2023. The Tax Withholding Estimator can help wage earners determine if there is a need to adjust their withholding, consider additional tax payments, or submit a new W-4 form to their employer to avoid an unexpected tax bill when they file. As taxpayers gather tax records, they should remember that most income is taxable. This includes unemployment income, refund interest and income from the gig economy and digital assets. Taxpayers should report the income they earned, including from part-time work, side jobs or the sale of goods. The American Rescue Plan Act of 2021 lowered the reporting threshold for third-party networks that process payments for those doing business. Prior to 2022, Form 1099-K was issued for third-party payment network transactions only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. Now a single transaction exceeding $600 can trigger a 1099-K. The lower information reporting threshold and the summary of income on Form 1099-K enables taxpayers to more easily track the amounts received. Remember, money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable. Those who receive a 1099-K reflecting income they didn’t earn should call the issuer. The IRS cannot correct it. Credit amounts also change each year like the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Dependent Care Credit. Taxpayers can use the Interactive Tax Assistant on IRS.gov to determine their eligibility for tax credits. Some taxpayers may qualify this year for the expanded eligibility for the Premium Tax Credit, while others may qualify for a Clean Vehicle Credit through the Inflation Reduction Act of 2022. Refunds may be smaller in 2023. Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no Economic Impact Payments for 2022. In addition, taxpayers who don’t itemize and take the standard deduction, won’t be able to deduct their charitable contributions. The IRS cautions taxpayers not to rely on receiving a 2022 federal tax refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer. For example, the IRS and its partners in the tax industry, continue to strengthen security reviews to protect against identity theft. Additionally, refunds for people claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) can’t be issued before mid-February. The law requires the IRS to hold the entire refund – not just the portion associated with EITC or ACTC. This law helps ensure taxpayers receive the refund they're due by giving the IRS time to detect and prevent fraud. For taxpayers who are still waiting for confirmation that last year’s tax return processed, or for a tax year 2021 refund or stimulus payment to process, their patience is appreciated. As of November 11, 2022, the IRS had 3.7 million unprocessed individual returns received this year. These include tax year 2021 returns and late filed prior year returns. Of these, 1.7 million returns require error correction or other special handling, and 2 million are paper returns waiting to be reviewed and processed. They also had 900,000 unprocessed Forms 1040-X for amended tax returns. The IRS is processing these amended returns in the order received and the current timeframe can be more than 20 weeks. Taxpayers should continue to check Where's My Amended Return? for the most up-to-date processing status available. Renew expiring tax ID numbersTaxpayers should ensure their Individual Tax Identification Number (ITIN) hasn’t expired before filing a 2022 tax return. Those who need to file a tax return, should submit a Form W-7, Application for IRS Individual Taxpayer Identification Number now, to renew their ITIN. Taxpayers who fail to renew an ITIN before filing a tax return next year could face a delayed refund and may be ineligible for certain tax credits. Applying now will help avoid the rush as well as refund and processing delays in 2023. Online tools are easy to use and available to taxpayers 24 hours a day. They provide key information about tax accounts and a convenient way to pay taxes. IRS.gov provides information in many languages and enhanced services for people with disabilities, including the Accessibility Helpline. Taxpayers who need accessibility assistance may call 833-690-0598. Taxpayers should use IRS.gov as their first and primary resource for accurate tax information.
Get refunds fast with Direct DepositTaxpayers should prepare to file electronically and choose Direct Deposit for their tax refund – it’s the fastest and safest way to file and get a refund. Even when filing a paper return, choosing a direct deposit refund can save time. For those who do not have a bank account, the FDIC website offers information to help people open an account online. Taxpayers can download Publication 5349, Tax Preparation is for EveryonePDF, for more information to help them get ready to file. via Freelancers Union Blog https://blog.freelancersunion.org/2022/12/13/get-ready-now-to-file-your-2022-federal-income-tax-return/
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Workplace stress is highly personal. Some people thrive in fast-paced jobs, such as emergency room nurses, police officers, and air-traffic controllers. These are stressful jobs where making a mistake can put people’s lives at risk. The rest of us likely wouldn’t last a day in such high-pressure environments. But that doesn’t mean our jobs are less stressful. Every job has its own kind of stress. There could be short deadlines, endless paperwork, or the occasional angry customer. Or there may be meetings that drag on for hours, putting everyone even more behind. All can cause stress. In other words, it’s not just the job that creates stress. It’s also the way a person responds to the pressures and demands of each workplace that makes them stressed. Not surprisingly, people respond to stress differently. The way they respond depends on their personality and their workplace culture. Stress effectsShort-term effects of stress include:
Long-term constant stress can increase the risk for:
Stress also can affect your mind. It can impair your ability to focus and your imagination. Stress also increases the chance you’ll make mistakes because you’re not thinking clearly. Constant stress can affect your emotions and behavior. It can make you grouchy, impatient, less excited about your job, and even depressed. Check realityWhen you’re in a high-pressure situation, examine your train of thought to see if it’s adding to the stress you feel. Are you imagining a far worse outcome than is likely? Is the project or situation likely to affect your job approval, reputation, or income? Are you really out of your league? Or are the immediate demands really more of a challenge than a disaster in the making? Manage your timeCorrect time and priority management can reduce a lot of workplace stress. Start each day by making a to-do list of tasks, calls to make, and e-mails to write. Prioritize the list according to tasks you must do, those you would like to do, and those that can wait. Don’t schedule too much. And build in time for interruptions. Take a breakHourly mini-breaks where you stretch your shoulders, back, and neck can provide physical stress relief. This can then reduce mental stress. Lunch is often skipped at the expense of more stress. Try to take lunch if you can. Be realisticStop promising to do more than you can handle. Be polite as you say, “With the workload I have, I can’t take on more at this time.” Repeat yourselfEvery day, plan to spend some time at rest, but not asleep. Sit in a comfortable chair, close your eyes, and relax your muscles. Then focus on breathing regularly as you keep repeating one simple word aloud or silently. This might be a word such as "peace," "relax," or "om." Keep doing this until your muscles and mind are relaxed. Try muscle relaxationTry this relaxation exercise:
VisualizeSit or lie down and close your eyes. For 5 to 10 minutes, imagine you’re in a place you love. This may be the beach, the mountains, or the house you grew up in. Breathe slowly and deeply as you imagine what you see, feel, hear, taste, and smell in your special place. Breathe slowly and deeplyTry this:
Eat a healthy diet and exercise regularlyA healthy diet rich in whole foods, fruits, vegetables, whole grains, and lean protein may reduce stress. Having lots of caffeine, sugar, and alcohol can increase it. Many studies have found exercise reduces stress. Aerobic exercise works best for most people. This includes running, swimming, or brisk walking. Yoga, Pilates, tai chi, or simple stretching can also help. They help create a calmer, meditative state. CommunicateTalking with a family member or friend outside of work about the issues that cause your stress at work can help you put things in perspective. Explore solutions and ways to cope together. Get helpIf you’ve tried these self-help methods but continue to be highly stressed, get help. Talk with a mental health provider who specializes in stress management. via Freelancers Union Blog https://blog.freelancersunion.org/2022/12/07/managing-work-related-stress/
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Between the increase in expenses due to inflation and potential end-of-the-year deductions you can take, there is a lot to consider as you work to finalize your freelance business finances before Dec. 31. For this tax season, however, it is important to consider how inflation may play into your calculus, especially when it comes to deductions or if you raised prices to keep up with inflation. Many of the changes that were introduced in the Inflation Reduction Act will not go into effect until January 1, 2023, but there are still deductions you can take advantage of now that can help save you money when it comes to filing your 2022 taxes. A word of caution before you throw caution to the wind when it comes to deductions, for a business expense to be considered deductible by the IRS, it needs to be ordinary as well as necessary for the type of work you do. This means that you need to be honest and reasonable in claiming deductions. Given that the IRS has new funding to increase their oversight and follow up on taxpayer issues, it is critical to ensure that you can substantiate all of your deductions with accurate records because the environment is ripe for more small business audits. With all of these caveats in mind these are the top ten freelance business expense deductions to consider claiming on your 2022 tax return:
2. Using a vehicle for business purposes. You can deduct the costs related to running your car if you use it for business purposes. As such, you can use a standard mileage rate which is 62.5 cents per miles in 2022 or pick the actual expense method. The actual expense method indicates the actual costs incurred when operating your car for business needs including maintenance, fuel, and incidental expenses. 3. Health insurance premiums. You can deduct health insurance premiums as long as you have a taxable profit greater than the cost of your total premiums. In addition, if you use the healthcare exchanges to get your health insurance, keep in mind that Health insurance subsidies that were extended under the ACA remain available. The Act includes an extension of the temporarily expanded health insurance subsidies, originally instituted as part of the American CARES Act (ACA) as tax credits, which were put in place for 2021 and 2022 as part of Covid relief. There are more generous subsidies in the Act which remain available through the end of 2025. If you are self-employed and are getting your health insurance through the government health insurance exchanges with subsidies, then you should be able to avoid any significant premium increase, all else being equal in terms of your coverage, etc. 4. Training and continuing education classes. You can deduct up to $4,000 in tuition and fees expenses incurred when pursuing continuing education to improve your skills and maintain licensing. To claim this deduction, you need to fill in Schedule 1 and Form 8917. In addition, if you are taking classes toward a degree from an accredited education institution, you can claim the American Opportunity Tax Credit if your income is less than $90,000 individually or $180,000 (married filing jointly). 5. Home office deduction. You can deduct expenses that are related to working from home in proportion to the space you use exclusively for this purpose as long as your home is the principal location for your business. Costs such as utilities, rent, repairs, security, and renter's insurance can be claimed. Or, instead of tracking and calculating these costs, you can use the simplified deduction which allows for $5 per square foot of space dedicated to your business with a maximum of $1500. 6. Business meals, entertainment, and gifts. In 2022, business meals and beverages are 100%, which includes takeout and delivery meals as long as the expenses are reasonable and related to your business. Entertainment for client-related activities is not deductible.
Once you have your current year deductions squared away, take time to look ahead to the 2023 tax year as part of your year-end business plans, consider these Inflation Reduction Act deductions which you may be able to take advantage of: More tax credits for energy-efficient purchases including new and used electric cars. The new law, when enacted, has a far-reaching and expansive list of tax credits to support energy-efficiency and climate preservation measures such as:
If you have been thinking about making upgrades to your home for energy efficiency or purchasing an electric vehicle, then now may be the time to do it based on the tax incentives included in the IRA. However, there are a few finer points to be aware of on the qualifications for the electric vehicle tax credits:
If the metals requirement is not met, buyers are eligible for half the tax credit or $3,750.
Wrap up your year-end tax planning with these tips and tighten up your recordkeeping to avoid a 2022 business tax audit.Maximizing tax deductions for your business really comes down to careful planning and meticulous recordkeeping. If you are not already doing so, make 2022 the tax year you create a habit of tracking all of your business-related expenses so you can ensure you capture every possible deduction with the proof necessary if the IRS becomes inquisitive about items on your return. You will need to keep all of your receipts to substantiate the deductions you are claiming. You can use an app to make this easier. Remember, a credit card statement is not sufficient in the eyes of the IRS, you need actual itemized receipts. If you are not sure about some of the deductions your freelance business may qualify for, be sure to contact a tax professional early so you can have expert advice available before tax season reaches its peak. via Freelancers Union Blog https://blog.freelancersunion.org/2022/12/06/reduce-your-freelance-tax-bill-with-these-top-year-end-deductions/ |
AuthorI have 5+ years experience working as a medical transcriptionist. When I am not working, I enjoy sports like playing basketball or judo. I love making friends and connections. Archives
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