Experts Share 16 Tax Tips Every Freelancer And Side Hustler Should Know

    Psst, you might be able to write off your home office!!

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    If you got a 1099 tax form in the mail, there's a whole bunch of tax information you need to know.

    To help you out, we talked to a couple of tax experts who broke down everything you need to know about filing your 1099 into a 16 actually easy-to-understand tax tips.

    1. If your 1099 form says you made $400 or more in 2020, you have to file and pay taxes on that income.

    Screenshot of self-employed information from the IRS

    2. And those taxes can be high, because when you freelance, taxes aren't taken out of your paycheck as you go.

    3. To pay those taxes, you should put aside at least 25% of what you make freelancing.

    4. Rather than paying taxes once a year, you might need to file your taxes quarterly.

    Screenshot of estimated tax payment dates

    5. Keep in mind that you may qualify for additional aid through a COVID tax bill.

    Screenshot of the IRS coronavirus tax relief page

    6. Unlike most regular employees, people who freelance can write off the things they have to buy to do their work.

    7. These write-offs or expenses are often called itemized deductions, and you'll want to track them carefully. That being said, in the end, it may make more sense to choose the standard deduction instead.

    8. Remember that 15.3% self-employment tax we talked about? You can write off part of that, too.

    9. And, if you pay for your own health insurance, you can write off your premium payments.

    Screenshot of a health insurance premium bill

    10. If you work from home, you may be able to deduct your home office.

    11. There are two ways to write off your home office — and one is noticeably easier.

    Screenshot of home office deduction options

    12. You might also be able to take a 20% qualified business income deduction.

    13. If you pay for work expenses regularly, you might want to have a separate credit card just for freelancing.

    Screenshot of some business credit card options

    14. To avoid being audited, make sure your 1099s are correct and carefully review everything before you hit submit.

    15. And, be honest about your expenses and deductions.

    16. Finally, you might want to pay someone to do your taxes — especially if it's your first year freelancing.

    Experienced freelancers, speak up! What expert tips have you learned along the way?

    And for more money tips and tricks, check out our other personal finance posts.