In this rapidly-changing world, almost everyone wants to step into the entrepreneurship world to enjoy working independently. The lucrative profits and the autonomy you get by working for yourself encourages people to start their businesses, while others look for freelancing opportunities. As a result, self-employment is increasing rapidly, but unfortunately, individuals struggle to keep their businesses in operation due to inadequate management practices.
While most self-employed people don’t maintain financial records, others fall into legal troubles because of failure to pay taxes. Undoubtedly, giving away a chunk of income or profits is not on anyone’s bucket list, but it is a legal obligation. Every person earning more than $400 a year is liable to pay a self-employment tax of 15.3% on total annual income.
Employers automatically deduct social security and tax payments from salaries, but you have to foot bills yourself since you are self-employed. In this modern era, you don’t have to stand in long queues or scribble on a handful of IRS forms to file taxes. The evolution of tax preparation software and applications is simplifying the process. It facilitates individuals with little or no tax knowledge to accurately calculates taxes and file returns, closing doors for legal troubles.
In addition to providing an easy-to-use interface, the software offers quarterly tax payment support. Thus, you can make estimated quarterly payments on both the state and federal level. If you are having trouble fulfilling legal tax obligations, give a shot following apps.
Best tax calculating software and apps for the self-employed:
Although being self-employed has its benefits, freelance work can be quite volatile. From waiting for the next gig to calculating taxable income – freelancers often feel anxious. Instead of letting all this overrule your work and productivity, download Hurdlr. It is a Freelance Income Tax Calculator for all independent contractors, self-employed individuals, and freelancers.
It estimates your weekly, monthly, quarterly, and annual income, depending on how often you work. In addition to tax calculation, it tracks your business spending – laptop repairs, conference fees, operating supplies, and more. That way, you can underline the tax deductibles, helping you reduce the overall taxable income.
Moreover, you can automatically generate detailed tax reports. It will include all details regarding your income, expenditure, and profits to give a fair idea about your annual performance. Do you know the best part? Hurdlr won’t add to your long list of expenses because it is free to use. Thus, reap the benefits of this incredible application to fulfill tax obligations and boost income.
With all tax obligations, freelancers find it troublesome to get started. TurboTax is a software for all inexperienced tax fillers. It offers live support options that assist round the clock. If you are aiming to maximize tax deductibles, this software will unfold a pertinent pricing plan. Simultaneously, it will ask questions to walk you through the entire tax filing process.
Alongside calculations, the quick explanations of confusing terminologies and processes will help you learn the ins and outs of taxation. Besides this, you can import and export tax forms in this application. It will let you get all reports and returns reviews by a certified public accountant (CPA) without an extra fee. Nevertheless, all these perks come with a price. You can get the deluxe plan for $110 and the premium one for $140.
Credit Karma Tax
Credit Karma is a famous finance company offering various auditing and monitoring services. Lately, it came up with a tax filing application that got everyone talking about it. It has a straightforward and easy to use interface, streamlining the filing process. Firstly, it shows you the taxable sections depending on your income level and tax situation.
It also offers a maximum refund guarantee, which means you have to pay fewer federal taxes. Secondly, it ensures accurate tax calculation. The Credit Karma app accumulates all income, deducts expenses, and applies the standard tax rate, i.e., 15.3%. Above all, it offers free audit defense, which means you will have support from professionals if the IRS has to audit your returns.
Usually, self-employed individuals and freelancers have quite necessary tax returns and filing obligations. And in this case, H&R Block is likely to be the best option. It includes multiple forms, which means you can file the ‘Schedule 1’ through three different formats. It will let you report student loan interest, business income, expenses, and much more. Most importantly, you will get access to six years’ tax returns on the app.
Moreover, it performs a cost-basis calculation for income with expenses less than $5000. If you have any other application for tracking expenses, H&R Block will import all data to calculate tax deductibles. However, the self-employed online plan is a bit costly. You have to pay approximately $160 monthly and $240 for online assist plans.
Surprisingly, Liberty tax offers a handful of tax preparation solutions for self-employed individuals. It reviews your return for hundreds of credits and deductions, securing you the biggest possible refund. Likewise, it gives access to live chat, email, social media, and in-person meetings. After all, they have thousands of company locations across the United States.
Besides this, if you have any tax withholdings, it lets you complete a W-4 form. The tool will make calculations with a series of sub-calculations. In short, it crunches all numbers, unfolding the withholding amount you have to claim.
TaxAct is more like every other tax filing software. It lets users import forms, file returns, and calculate annual tax payments. Similarly, it has an online help wizard to answer all your tax-related queries, offering unlimited chat support. Each plan comes with a refund policy and a 100% accuracy guarantee to establish trust with users.
Furthermore, TaxAct offers a downloadable version of its application on Mac and PCs. Thus, you can download the software to escape the hassle of preparing taxes online.
Tax Slayer is an online application launched by Rhodes-Murphy, a reputable Georgia-based company. Users have to pinch their tax situation – the last year’s filing records and identification number. In turn, the software uses this information to find the best possible deductions. Although it doesn’t offer comprehensive explanations, you can email tech support 24/7.
Unlike most providers, Tax Slayer gives access to professionals and accountants who can review the tax return. It also reimburses its customers for state and federal penalties.
Indeed, working all by yourself is not a piece of cake; in addition to managing financials, self-employed struggle to fulfill their legal tax obligations. With emerging taxation tools, freelancers no longer have to worry about the filing and returns procedure. They can automatically calculate taxes, account for deductibles, pay taxes, and focus on their work.