Now the question arises, what kind of papers does a freelancer required? For freelance income, a record and total of all money received, including the list of all checks, cash and credit card money received. Moreover, the names of any stocks or bonds sold, dates bought and sold, total paid for the property and total received are required.

One must carry the receipt or a bill for every freelance expense he take on the tax return, this involves records for both cash and non-cash charitable contribution. Usually in countries like U.S. the system of taxpaying is when you start earning, for self-employers, such as freelancers, income tax has to be paid through a system called as estimated tax.

The advantage of paying estimated tax is that you can avoid the interest penalties, which are most likely to occur and more importantly during this process one has not to worry about the enormous amount of tax payment, due to the continuous dues year by year.

The freelancer must do tax planning quarterly or according the amount of revenue they are generating, it’s advisable to keep a tax professional with himself to keep in touch with the tax laws and procedures.

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