Why Every Freelance Writer Needs an Accountant on Your Side

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I didn’t work with an account the first time I went freelance.

Back then, I made a quarter of what I do now, so I figured I couldn’t afford one. I assumed hiring an accountant was a luxury I wasn’t quite ready for.

On the contrary, an accountant is a freelancing staple you can’t afford not to have.

Hiring an accountant should be the first investment you make as a freelancer. I promise it will save you time, money and sanity.

Whether you’re just starting out or trying to play catch up, you’ll be so grateful to hand this hurdle off to a pro.

Freelancers’ tax situations “Can be pretty complicated,” says Sophia Bera of Gen Y Planning. Hiring an account helps us learn “About what we need to track on an ongoing basis and what we should deduct.”

Even if you love numbers and paperwork, a professional ensures you’re doing things legally and with the most money left on your table.

Accountants save freelancers time

Why spend precious billable hours wondering what boxes to tick and whether you did your math right? Most accountants take care of everything — the right way — in just a few hours. It’s especially true for us creatives who hate numbers or simply have a full schedule.

Personally, when I spend too much time on work I hate, the work I love suffers. On days I try to research tax questions, I don’t have the energy to write great copy or manage my client load.

And since that’s the work I charge most for, I want to spend all my available hours doing that work.

Everyone has their own process, but here’s how I save time on my taxes:Les

  1. My assistant inputs invoices and expenses into FreshBooks (sort of what I might hire a bookkeeper for, but on a much smaller scale).
  2. I scan and upload tax forms (Think: 1099s) into my Dropbox “tax” folder throughout the year.
  3. Then, in March, I send everything to my accountant so he can take care of the rest.

Accountants help freelancers keep more money

Some folks think filing their own Schedule C isn’t particularly complicated. I am not one of those people.

But the most important reason to hire an accountant is because they help you keep more money. Most freelancers forget to account for many legitimate business expenses and end up paying more taxes because of it.

For example, my husband and I used TurboTax last year. The deeper we went, the more complicated it got. We were recently married, were renting out a room on Airbnb and I had recently started taking on freelance gigs on top of my full-time job.

We got about $2,000 back in our refund. Score!

But a few months later, after deciding to move to Europe, we hired an accountant to help with the international transition. She discovered that, through TurboTax, we’d missed out on an extra $1,000 in our refund. A thousand dollars.

Yes, she cost $500, but that’s still an extra $500 in our pockets because we hired her.

Accountants teach freelancers how to handle money

They’re not called your “most trusted advisor” for nothing. An accountant not only knows the ins and outs of your freelance business, but is familiar with the nitty gritty details of your life.

Working with an accountant has been invaluable to me as a general adult human. My first accountant provided me with general coaching on how to document my expenses to protect me should the IRS ever audit my return.

Your partnership “Can also allow you to understand what qualifies as a business expense and familiarize yourself with the rules to maximize your deductions,” says CPA Dan Hodgin. Who knew a percentage of my rent counted as a business expense?!

How to choose the right accountant

Not every accountant is right for you. Case in point: The first accountant I worked with was great for freelancers, but not so much for expats. When I got to Germany, the first accountant I interviewed had a ton of fancy experience, but wasn’t particularly friendly. The one I did hire is patient and happy to answer my endless questions.

Choose an account who speaks your language

Whatever your experience, you need an accountant who can be clear about what they need from you.

Yes, you want someone with experience (more on that below), but if you’re like me, sometimes it’s more important to work with someone who doesn’t make you feel stupid.

My first accountant had a ton of experience, but seemed to expect I knew everything about freelance taxes. Since this was my first time doing this, I needed someone who could hold my hand. It took months to find a young, friendly accountant who would answer my questions without doing a virtual eye roll every time I emailed. I’m so glad I did the research to find him.

Choose an account familiar with your situation

Experience definitely matters, but not all experience is created equal. An accountant who specializes in freelancers might not be right for startup owners. Or expats. Or luddites.

“Accounting” is such a broad term and you want someone who’s familiar with your exact situation. Right now, I have two accountants: One specializes in expat German taxes, the other works with many freelancers abroad.

“You need to find someone who’s willing to educate you about your tax situation,” added Bera, “So you can make sure you’re taking advantage of the deductions and tax credits available to you.”

It may sound too nitty-gritty —and most accountants have several specialities — but this granularity is worth investigating.

Ask for recommendations

Accounting isn’t just about filing your taxes each year. Do you also need bookkeeping help? Estate planning?

By talking to other freelancers in your area and industry, you can get a feel for who might be the best fit.

And size matters. Many freelancers want to build a relationship with someone long-term, so a huge accounting firm might not be the best choice. But small firms don’t offer every service under the sun, so consider your needs and act accordingly.

Talk to a few different firms, both large and small to get a feel for what you need.

 

Original: http://thewritelife.com/why-every-freelance-writer-needs-an-accountant/

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David Alexian

David Alexian has always had a passion for writing. From an early age, he has loved keeping journals; sometimes in note books but other times on little scraps of paper he could find when his diary was not close by. Over the years, he has explored writing psychological thrillers, suspense and fantasy stories. His mind and heart is fed by his love for creating excitement for his readers. He loves to play with the perceptions of human realities; the challenges and triumph of the human spirit. David is the first son to two Caribbean parents, with the influence of European and African heritage. He is married to a supportive and caring wife. At present, David holds a Masters of Arts degree in Psychology and works with children who have experienced trauma, abuse or mental disturbances. As he writes, he experiences the freedom that comes with knowing his readers are excited, happy and satisfied.

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