It’s that time of year again. It’s that time of year when those of us who weren’t on the ball doing our taxes back in February see the calendar slowly approaching April 15th and know it’s time to act soon.
On this beautiful early Spring morning my wife and I sleepily walked downstairs at 7:30 this morning. Two hours later we were in the clear. Since this was my first year freelancing, well at least the last seven months of 2016 were completely freelance, we weren’t exactly sure if I royally screwed up my end.
As a freelancer you pay quarterly taxes. How much you pay is estimated based on last year’s income. Well, if you just started freelancing you’re kinda shooting in the dark. There are equations and estimation forms and other infuriating documents to help you try to guess how much you should pay each quarter. For me, I kept it fairly simple. I took approximately 31% of any income I had and put it towards federal taxes each quarter. And I nailed it.
One thing I didn’t realize is that even if I did the work in 2016 and billed for it in 2016 but got paid in 2017 that goes towards my 2017 taxes. I think that’s weird but okay. So I ended up paying extra into the system which we are getting back. But now I have to turn around and pay it next week for my 1st quarter 2017 taxes.
It was definitely scary when we were several thousand dollars in the hole. But write-offs and mortgages put us right where we thought we were supposed to be.
Alright, I’m off to brewery hop.