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April 2015

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It’s Tax Day!

Written by , Posted in Money & Finances

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What you need to know about paying quarterly taxes as a freelancerApril 15th is here already. Where has the first quarter of 2015 gone?! Today may not seem like a monumental day to you, but some are rejoicing or dreading today as it’s the day that income tax returns are due (unless you got an extension, but that’s another story!)

I got my taxes done by my accountant again this year and he finished them up mid-March.

After I started freelancing in July, I saved 30% of all my freelance income in case I had to pay in to taxes for 2014. I had nearly $1,500 saved up for that purpose alone. But when I went to find out how my tax return ended up, I was surprised to learn that I was going to get a small refund back!

I received a total refund of $357 and combined with my tax savings, which are now “extra”, I had a small windfall of $1,831.

I’ll admit it, I was pretty stoked to find out about this extra money and it couldn’t have come at a better time as I’ve had a few additional house projects come up that need to be completed ASAP. Unfortunately, the projects will cost me more than just my tax refund money, but I’ve got a plan in place to help me avoid charging anything onto a credit card. I’ll tell you more about that later.

In the meantime, here is a little table showing how I’ve spent a portion of my tax refund already:

CategoryAmount
Accountant Fee$450.00
Car Expenses$78.71
House Project (so far)$291.93
TOTAL SPENT$820.64
TOTAL RECEIVED$1,831.00
REMAINING$1,010.36

2015 Tax Plan

Another thing I want to discuss today is my plan for 2015. After speaking with my accountant, I’m not required to pay quarterly taxes for my freelance income because I got a refund in 2014. But I know that I’ve already made more in the first 3 months of freelancing this year than I did in the entire year of 2014. Therefore, my accountant and I decided I should begin paying a little something into quarterly taxes to cover my bottom so I (hopefully) don’t owe at the end of the year.

This is my first time paying quarterly taxes and so I’ll update you as I learn more at the end of the year. I thought Femme Frugality did a great job of explaining more about her quarterly tax strategy in this post. She and I seem to have a similar opinion on paying quarterly taxes this year, so be sure to check that post out for more info.

Have you ever paid quarterly taxes? Why or why not?

*Part of Financially Savvy Saturdays on brokeGIRLrich, A Disease Called Debt and Shoeaholic No More*

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Kayla

Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at ShoeaholicNoMore or follow her on Twitter.

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    • Kayla @ Shoeaholicnomore
    • Kayla @ Shoeaholicnomore
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