It hits you like a bucket of icy water – the realization that a large portion of your freelance income is going straight to Uncle Sam.
Luckily, there are ways to get tax help for freelancers.
By forming your own business, you may be able to lower your taxable income. And with services that can help get your business off the ground, setting up your own company has never been easier.
Freedom to file how you want.
- After forming your business, you gain the flexibility to decide exactly how you want to file your tax return. With an LLC, you get to choose to file as a sole proprietor or partnership to continue claiming your earnings as an individual or you can petition to file as a corporation for even more options.
- By using a service to help launch your business, you can speak directly to an attorney to find out which choice works best for you with plans starting at $145.
Potential tax savings for corporations.
Let’s face it. As a member of Twine, you’re already a part of a network for established creative professionals. As a freelancer, why not take advantage of the tax benefits that you may qualify for by filing as a corporation – such as:
- Additional tax savings based on your income bracket.
Example: If you made $85K in 2018 and filed as a single individual, you would owe 24% of your income in taxes. A corporation that earned the same amount would be taxed at the lower rate of 21%. That 3% difference might not sound like a lot, but at $85K, it translates to an extra $2,550 in your pocket at the end of the year. That alone covers the initial $145 fee for starting your business.
- You can also choose to pay yourself a fair salary, which can be deducted from your earnings as a business expense.
- As any freelancer is likely aware, you pay more taxes than a traditional employee due to self-employment tax. With a corporation, you can offset this cost by keeping a portion of your earnings tied up in your business. This can lower how much you personally need to pay for Social Security and Medicare.
Deduct the cost of doing business.
- Operating as a business instead of an individual makes it easier to write off your various expenses such as your computer, relevant software and even your internet and phone bills.
- You can formally lease your own personal assets to your business and deduct the costs from your taxable income. This can include anything from property for an office space to your car.
- In many cases you can even deduct the cost of forming your LLC, making the decision to become a business owner a simple one.
Empower your business with a comprehensive legal plan.
Navigating through the world of taxes can be difficult and that’s why you go to experts for help. The same is true for setting up a business. There are lots of options available and figuring out which one best fits your needs can be treacherous as making the wrong choice could leave you unprotected.
Launch by LegalShield is the only service that gives you comprehensive legal help to get your business running. An attorney will guide you through the process to determine your business needs. When you form your business with Launch by LegalShield, you also get access to a comprehensive legal plan that helps with:
Consultation and advice for your business.
- Intellectual Property
- International Law
Legal document and contract review.
- Real Estate Lease Agreements
- Loan Contracts
- Vendor Agreements
- Non-Disclosure Agreements (NDA)
- Equipment Lease Agreements
- Purchase Agreements
- Employee/Employment Agreements
- Copyright and License Agreements
- Intellectual Property Assignments
- Employee Handbooks
- Joint Venture Agreements
- Client contract review on your behalf.
- Debt collection.
- And you get 25% off the Provider Attorney’s standard corporate hourly rate for additional legal services.
An audit doesn’t have to be the end of the world.
An audit can be scary for anyone, but it can be especially troubling for a freelancer. But just because you’re self-employed doesn’t mean that you are on your own.
After making your business official, Launch by LegalShield puts a lawyer on your side to help deal with tax issues related to your business. If you get hit with an audit, your attorney can offer:
- Unlimited consultation for covered legal matters.
- Advice on how you can best organize your records.
- Guidance for how to speak with your auditor.
- Representation under your Preferred Member Discount.
There are several benefits to forming your own business and lowering how much you pay in taxes is just the start. Without an LLC, you are personally responsible for all your professional costs. In plain terms, this means that your own assets can be taken to pay off your debts. Forming a business creates a second barrier in which only your business is liable for its own debts. This also means that your personal property can’t be touched if your business is sued. In fact, this added layer of protection is why it’s called a Limited Liability Company.
Become a business owner.
For as little as $145, you can begin the process to form your business today. You’ll receive access to your own attorney who will help you choose the right business classification based on your individual needs. The attorney will help with all the paperwork and will even file the documents with your State on your behalf.
Take the step from freelancer to small business owner with Launch by LegalShield to spend more time working on your next project and less time worrying about legal issues.
Lower your taxes by becoming a small business owner today!
This gives a general overview of LegalShield’s Launch products and legal plan coverages. The benefits described are not available in all states. See a summary plan description for specific terms, coverage, pricing, conditions and limitations. This is not intended to be legal or tax advice. Please contact an attorney and tax professional for any legal and tax advice or assistance. *Three telephone consultations per membership year for certain designated areas of law. Up to 20 documents per membership year (up to 6 in any month) of 15 pages or less.