US Taxes For Freelancers How To DIY: Save Big & Pay Less Tax

A guide to fundamentals of doing your US Taxes yourself if you are self employed with different streams of revenue.
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  • Lectures 28
  • Length 1.5 hours
  • Skill Level Intermediate Level
  • Languages English
  • Includes Lifetime access
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About This Course

Published 4/2015 English

Course Description

This brand new course is only for people who want to save money on tax preparation and are ready to devote a little bit of time learning how to do US Taxes for self-employed individuals themselves.

In this course you will learn:

  • How to do a US Tax return for consultants, freelancers, and contractors
  • What business expenses you can use to lower your tax bill
  • When and how pay your taxes to stay current

If you want to get the knowledge and stop paying someone else for what you can learn to do yourself, then this course is for you.

I am committed to supporting you. You will get to ask me any questions you have about doing taxes in discussion forum absolutely free. I am available to help you if you feel stuck, I am just a click away and will answer as soon as I can.

Do you want to go from being confused and frustrated about taxes to doing them correctly and confidently?

Before serving my first client at H & R Block, one of the biggest tax preparation companies, I had over 130 hours in class training and did tens of case studies. 75% of my clients come back to me tax season after tax season.

In this course will explain tax preparation terms and concepts in plain English. You will get an opportunity to do a couple of case studies for practice, so by the end of my course doing your own taxes will be a walk in the park.

My course consists of screen cast videos (yes, you will see what I see on my screen!) and text lectures. We will go over income documents and expenses records. I will explain which tax benefits you get no questions asked, and which ones you need paperwork for. You will get to see the whole tax preparation process over my shoulder.

I created this course for freelancers who want to save money by doing their taxes themselves rather than paying top dollar at the retailer.

If that describes you, go ahead, enroll into my course, there is a 30 day money back guarantee.

Want a quick preview? There are a couple of lectures available for fee to help you decide.

You have unlimited lifetime access to this course and when I add new lectures, it will be at no cost to you. I will add new lectures and it will be free for you.

The Udemy money back guarantee is a promise that the product in front of you is really good and will help you.

This course will help you success, so don't delay, enroll now.

What are the requirements?

  • You will need a device to play videos and read text (a desktop computer, a laptop, or a smart phone), a note pad to take notes and ear phones.

What am I going to get from this course?

  • You will be able to do a tax return for your business if you are self-employed full time or part time
  • You will learn how to do taxes for your side business without being overwhelmed by jargon
  • You will know what business expenses you can claim to lower your tax bill
  • You will know the benefits of doing your tax preparation yourself

What is the target audience?

  • If you are consulting, freelancing, and contracting, as a sole proprietor this course is for you
  • If you are a part of a partnership this course is not for you
  • If you are a tax professional looking to expand your knowledge, this course is not for you

What you get with this course?

Not for you? No problem.
30 day money back guarantee.

Forever yours.
Lifetime access.

Learn on the go.
Desktop, iOS and Android.

Get rewarded.
Certificate of completion.

Curriculum

Section 1: Self-Employment Taxes Intro - Freelancers, Consultants, Independent Contractors
02:39

Federal income tax is a pay-as-you-go tax. You must pay it as you earn or receive income during the year. An employee usually has income tax withheld from his or her pay. If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax.

You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax of $1,000 or more when you file your return.

Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax. This form is in supplementary materials for this lecture.

If you do not have to make estimated tax payments, you can pay any tax due when you file your return.

Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. It is similar to the social security and Medicare taxes withheld from the pay of most wage earners.

Who This Course Is For: Self Employed, Sole Proprietors, Independent Contractors
Article
02:16

You have to file an income tax return for 2014 if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement mentioned in the video.

File your income tax return on Form 1040 and attach Schedule C or Schedule C-EZ. Enter the net profit or loss from Schedule C or Schedule C-EZ on page 1 of Form 1040. Use Schedule C to figure your net profit or loss from your business. If you operated more than one business as a sole proprietorship, you must attach a separate Schedule C for each business.

02:15

Owning and running a business together for a married couple can be a lot of fun and an opportunity to spend time together.

That might also mean that they will have to fill out a much more complex form to report income and loss in their business. This lecture will show you two different ways the process can be made much simpler if you do not want to deal with filling out a document treating your business as a partnership rather than a sole proprietorship.

01:48

Use your SSN as your taxpayer identification number. You must put this number on each of your individual income tax forms, such as Form 1040 and its schedules.

The IRS will issue an ITIN if you are a nonresident or resident alien and you do not have and are not eligible to get an SSN.

You must also have an EIN to use as a taxpayer identification number if you do either of the following.

  • Pay wages to one or more employees.
  • File pension or excise tax returns.

If you must have an EIN, include it along with your SSN on your Schedule C

In operating your business, you will probably make certain payments you must report on information returns.

Employee. If you have employees, you must get an SSN from each of them.

Make sure Form W-4, Employee's Withholding Allowance Certificate, is completed by each employee so the correct federal income tax can be withheld from their pay.

Other payee. If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. If you must report payments to an organization, such as a corporation or partnership, you must get its EIN.

To get other's tax ID numbers, have them fill out form W9.

Employment Taxes, Excise Taxes, Information Returns: Form 1099-MISC, Form W2
Article
Accounting Periods And Accounting Methods For Self-Employed Individuals
Article
04:16

Business Income

Your business income will be in the form of cash, checks, and credit card charges.

But business income can be in other forms, such as property or services.

  • Bartering for Property or Services
  • Real Estate Rents
  • Personal Property Rents
  • Interest and Dividend Income
  • Canceled Debt
Direct seller Income must be reported on Schedule C or C-EZ.
03:05

Business Expenses

Business bad debt.

Car and Truck

Local transportation expenses

Reimbursing Your Employees for

Depreciation

Repairs

Employees' Pay

Insurance

Self-employed health insurance deduction

Legal and Professional Fees

Pension Plans

Rent Expense

Rent on your home

Taxes

Real estate taxes

Sales tax

Travel expenses

Transportation

Taxi, commuter bus, and limousine

Baggage and shipping

Car or truck

Meals and lodging

Cleaning

Telephone

Tips

Entertainment expenses

Business Use of Your Home


Other Expenses You Can Deduct

  • Bank fees.
  • Donations to business organizations.
  • Education expenses.
  • Energy efficient commercial buildings deduction expenses.
  • Impairment-related expenses.
  • Interview expense allowances.
  • Licenses and regulatory fees.
  • Moving machinery.
  • Outplacement services.
  • Penalties and fines you pay for late performance or nonperformance of a contract.
  • Repairs that keep your property in a normal efficient operating condition.
  • Repayments of income.
  • Subscriptions to trade or professional publications.
Dispositions of Business Property And General Business Credits
Article
Let's Check How Much You Remember About Reporting Business Income And Expenses
5 questions
Section 2: General Concepts: What's a Return? Filing Status, Exemptions. What's A Tax Break
02:55

This lecture is an explanation of what a Federal Tax Return is. I also show you what document is called US Federal Tax Return, address in short all the parts of that document and show you modifications of that document which are used as well for simpler US Federal Tax returns.

The process of US Tax preparation always falls into the following steps:

1. List all income you made for the year from all sources.

2. Subtract all expenses you can claim as deductions.

3. Tax will be calculated as % of the amount above (percentage depends on the amount of money you make - there are several tax brackets).

4. Subtract all expenses you can claim as credits toward that tax.

5. Subtract amount of tax you already paid throughout the year (paycheck withholding or estimated tax paid).

6. Add any self employment tax (if you had gigs on the side or actually run a business that you own).

7. Subtract expenses you can claim as refundable credits toward the tax above.

8. Your result will be either refund (if you overpaid tax) or balance due (if you underpaid tax during the year).

Your goal to be as close to ZERO as possible because IRS is not after ALL of you money, they only want the amount that you are liable for as tax.

Every tax preparation software will calculate your tax liability exactly the same way no matter if you go to a tax office or do it yourself on your own computer. There is no need to pay someone to do your taxes if you can take this course and learn how to do it correctly yourself.

Every tax preparation software will generate your tax document depending on the amount of information you need to enter. It will be either the full form called 1040, or a shorter form called 1040A, or a one page form called 1040EZ.

This is only general information on what we refer to as 'US Federal Income Tax Return' and 'doing taxes'.

Please watch the rest of the course for in depth information on all 8 steps of tax preparation.

01:48

Each person you list on your tax return will generate an exemption (amount of money which is not taxable) – a deduction which reduces your taxable income. Less income means a smaller tax bill. In 2014 a personal exemption equals $3,950.00. This is not the same term as I used when talking about form W4 (withholdings determination) – on form W4 this word means numbers 0-14 on line 5 which determine the amount of your withholdings from each of your paychecks.

Let's say for instance you use Married Filing Jointly status and also have your daughter living with you, your niece and even though your mother does not live with you, you provide more than 50% of her support and her income is lower than $3,950.

This is how your first tax break for tax year 2014 will look like:

1. Your personal exemption $3,950

2. Your spouse's personal exemption $3,950

3. Your daughter's personal exemption $3,950

4. Your niece's personal exemption $3,950

5. Your mother's personal exemption $3,950

When you add all of these numbers, the amount by which your taxable income will be reduced equals $19,750.

That's exactly why a personal exemption is the first tax break everyone receives.

04:25

In addition to personal exemptions you can take either itemized deductions or one standard deduction on your return, which reduces your income and your tax bill even more. What's the best way to reach the smallest possible taxable income - with a standard or itemized deduction? It depends on your personal circumstances.

IRS Publication 17 clearly states that you cannot take both, but take either itemized or standard deduction – whichever gives you SMALLER TAX BILL.

How much is your standard deduction?

That depends on your filing status.

In 2014 it is

$6,200 for single filers or married couples filing separately.

$9,100 for head of household filers.

$12,400 for married couples filing jointly or a widow(er) with qualifying child

The standard tax deduction is a flat amount that the tax system lets you deduct, no questions asked.

Which begs a question – what expenses are covered by a standard deduction? The answer is in the form called Schedule A or Itemized deductions.

Let's take a look at it.

If all of the expenditures that you can list on Schedule A total higher than the standard deduction, you will save on your taxes by itemizing them on Schedule A. If not, claim the standard deduction.

So the answer to the question about what expenses are covered by the standard deduction is in this list:

Medical Expenses

Charitable Donations

Job Related Expenses

However, if you don't spend more than 10% of your income on medical expenses, do not pay real estate tax and mortgage interest (like both couples in the case studies, who rents their apartments), do not contribute a lot of money to charity, most likely your state and local taxes withheld from your paycheck will not be more than the standard deduction.

In this case go ahead, claim the standard deduction, you do not need to fill out Schedule A, and you don't need to keep receipts for your housing.

Article

This lecture includes details you need to understand the terms used in the software so you can answer the questions regarding Obamacare (Affordable Coverage Act) as it relates to you, your family and if possible, avoid paying a penalty.

As you've probably heard, the ACA, which some people refer to as "Obamacare", requires most Americans to have health insurance. If you already have insurance - or even if you don't - we'll walk you through what this means for your taxes.

You're considered covered for 2014 if you had minimum essential coverage for at least one day of each month during 2014. Special rules apply if someone was adopted, born, or died during 2014.

Article

If you have received a form 1095-A (Health Insurance Marketplace Statement), you might want to know how to read it.

Here is line by line explanations for your 1095-A form:

  • Line 1 contains the name of the state where you enrolled in health insurance coverage.
  • Line 2 is the number the Marketplace uses to identify the policy in which you are enrolled.
  • Line 3 contains the name of the company that holds your policy.
  • Line 4 contains your name or the name of someone in your household with health insurance coverage from the Marketplace.
  • Line 5 may show only the last 4 digits of the social security number (yours or one of your household members with health insurance coverage from the Marketplace.
  • Line 6 will be filled out if there is no Social Security number.
  • Line 7 only contains information if advanced payments are made (if the insured person is married).
  • Lines 10-11 - check start and end dates for accuracy. If you were enrolled for the whole year, you will see December 31st 2014 on this line and you must re-enroll for annual coverage each year.
  • Lines 12-15 are self explanatory.
  • Part II details information for each individual covered under the health insurance policy. If more than 5 individuals covered, you will receive additional 1095-A forms. If you enrolled into Marketplace coverage with one or more people who you don't list on your tax return (for example your children under age 26), then make sure they got a copy of this form. If during enrollment you specified that you would not list them on your tax return, then you will not see their info on this form and they will get their own form from the Marketplace.
  • Part III information is there for you to use it when completing form 8962 (Premium Tax Credit) when doing your taxes.
  • Part IIIA is the total cost of the monthly health insurance coverage premium. If you received advance tax credit payments, you may only be responsible for a portion of this total cost.
  • Part IIIB - this amount is calculated by the Marketplace. It is used to determine your monthly advanced tax credit payments and premium tax credit you get on your tax return. Keep the Marketplace informed about all change to your coverage during the year so these numbers are accurate.
  • Part IIIC - this is the amount of advanced credit payments that were made to your insurance company for all or part of your premiums. If no payments were made, this section will be blank.
US Tax Preparation Fundamental Concepts Everyone Needs To Understand
3 questions
Section 3: Nancy Green Case Study: Self-Employed Freelancer With Four Streams Of Revenue
Meet Nancy Green - Here's Her Family Information And Her Income And Expenses
Article
01:00

Let's go on the Internet now and find Tax Hawk website. I prefer this website to others for a couple of reasons - the software is full of Help topics and anyone can use it to file their federal tax return for free, regardless of income level. To file a state tax return is extremely affordable too.

So, click 'Start Free Return' button and you will see new account screen with 'Create New Account' button. Once you click on it, the software will open up a template where you can provide your e-mail address which will become your user name, create password, create security questions, and click 'Create New Account'.

The next screen will give you an overview of what kind of support you can expect from this company - tax help, technical support for the website, etc. They give you a promise to take you all the way through tax preparation process.

You are done with this step and now you are ready to start filling out your tax return.

05:03

Once you create an account in an online tax prep software, you need to enter your and your family personal information.

The first thing you have to chose is your filing status. It is 'Head of Household' for Nancy Green. Make sure to watch the video and read supplemental materials to find out what requirements you need to meet to be able to claim this most advantageous filing status for single/divorced people.

Your personal information and your dependents personal information is entered on separate screens, there are requirements which your dependents need to meet to qualify you for Head of Household filing status, and other possible tax benefits, so please make sure you don't fly through the video, but watch closely and read everything on your screen when you do your own case study for Nancy Green.

08:13

If you wrote a book and put is up for sale on sites like Amazon, then at the beginning of the year you will receive a 1099-MISC form with amount of sales you got, recorded in box 2 of that form.

This is business income and Nancy will report it on Schedule C. She will enter all the information from her 1099-MISC into software and answer all the questions regarding expenses she had incurred to generate this income.

She will also have an opportunity to claim any depreciation of the business assets she uses to generate this income.

She did not have any health care insurance associated with this business, nor any car expenses. She sold $350 worth of books without help of retailers, to her friends and family. She will report that income on her Schedule C for book selling business as well.

05:40

If you sell product for a company as an independent distributor and make commissions on those sales (more than $600), you will get a 1099-MISC form from the company and the amount of your commissions will be recorded in box 7.

You have to report that income on a Schedule C. If you had expenses associated with this income, like Nancy did, you can report those expenses.

Advertising, supplies, use of your car, parking fees, talls, any fees for networking events, training, membership fees - all of it can be used to offset your business income.

Make sure you go over all the screens and read instructions carefully, so you take advantage of all tax benefits as a business owner.

Supplemental materials for this lecture and other lectures in Nancy Green case study will provide you with plenty of additional information, so you can make educated choices while preparing your taxes.

09:52

If you have a business with a name registered as an LLC, you can use Schedule C to report your revenue.

Have your 1099-MISC ready and enter them into the template on software, exactly like you see it on your paper copy. Make sure you records all vehicle expense, better yet, use standard mileage deduction. To do that, you need to have accurate records of the dates and places you drove your car to for business. In 2014 standard millage rate is $0.56.

If you used a room in your home exclusively and regularly for this business, you can record that on your Schedule C and get a deduction.

Nancy purchased a couple of items to use specifically for this business. She can claim depreciation deduction for these expenses. Make sure your business usage is recorded accurately.


01:24

If you have alimony income (which IRS considers to be uncommon income), report it in Other Sources Of Income Section in the flow of the tax interview in the software.

Do not mix it up with child support because child support is not taxable to you. Just record the number in the box on the screen and you are done.

01:54

The answer to this question is simple once you know from the first section what standard deduction is and what the difference between the standard and itemized deductions is.

The bottom line - IRS wants you to claim the one which gives you the biggest benefit, so make sure you watch this lecture and make the right choice when doing this case study and your own tax return.

03:58

When preparing 2014 tax returns, most people will simply have to check a box to indicate they and everyone on their tax return had health care coverage for the entire year. You will not need to file any additional forms, unless you are claiming the premium tax credit or a coverage exemption.

Under the Affordable Care Act, you will need to report minimum essential coverage, report or claim a coverage exemption, or make an individual shared responsibility payment when you file your 2014 federal income tax return. If you are not required to file a tax return and don't want to, you do not need to file a return solely to report your coverage or to claim an exemption.

If you and your dependents all had minimum essential coverage for each month of the tax year, you will indicate this on your 2014 tax return by simply checking a box on Form 1040, 1040A or 1040EZ; no further action is required.

You will not need to send the IRS proof of your health coverage. However, you should keep any documentation with your other tax records. This includes records of your family's employer-provided coverage, premiums paid, and type of coverage. You should keep these – as you do other tax records – generally for three years after you file your tax return.

08:27

If you or someone in your household goes to college, make sure you have good records of all amounts paid for tuition, books, equipment, supplies, fees. These are all expenses that qualify for the credit.

You also should have received a form 1098-T from college. Look for it in the mail, and use it to report amounts listed on that form so you can get a tax benefit for those college expenses.

In this lecture I give you step-by-step instructions on how to report all of eligible college expenses even if they are not included on form 1098-T.

02:53

If your income is low, you might qualify for Earned Income Tax Credit.

How much of a credit you will receive depends on the number of children you claim on your tax return. In the supplemental materials for this lecture I included a chart showing amounts.

There will be a number of questions to answer in the tax interview flow, make sure you answer them correctly.

I have also uploaded more materials to read if you want to know more about this tax credit.

01:56

When you get to this part of your tax preparation, make sure you don't open up forms which you do not need, keep it simple, don't confuse yourself.

Nancy does not have to enter here, but take a look, you might find something that has everything to do with you and including these expenses on your own tax return can be very beneficial for you.

05:22

It is important to go over all possibilities for getting additional tax benefits before you file your taxes and print out a copy for your records. I am going to take you over each step in the process.

You will also have an opportunity to take a look at the preview of your final paperwork before you file, to make sure there are no typos, etc.

Make sure to take a look at the PFD file of Nancy's tax return preview and see how all the work which was done on preparing taxes is placed on appropriate lines of each form.

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Instructor Biography

Larissa Fontenot, US Tax Advisor, Excel Productivity Trainer, Udemy Instructor

First of all, let me acknowledge you for looking online trying to learn things which will improve your life. So many people just spend their time in front on TV, but not you. You are searching for the ways to make your life better.

I am Larissa Fontenot. I am originally from Russia, moved to the US in 2000.

I have 4 years of experience doing taxes for clients who are self employed, with home ownership, purchase, or sale, real estate rentals or vacation homes, ITIN (Individual Taxpayer Identification Number) application, health care expenses (e.g. medical, dental), charitable giving, military, investment/stock options,clergy, tax planning.

After having done hundreds of returns in the retail office at a big household name company and additional 173 hours of continues training (63 hours of which were in class), I have created US Taxes courses to help you see the forest behind the trees – the big picture that comes together like a puzzle out of all details of your financial situation.

As complicated as tax code is, I still can explain fundamental concepts to you in layperson language, so you can learn to confidently do your taxes yourself.

I can promise you, that it is quite possible to understand what goes into the calculation of your tax liability and take the mystery out of tax preparation: short 7 years ago I decided to make some extra money doing tax returns from people because I'd just gone through a divorce and had never done my taxes myself, as I am originally from Russia, and my American husband always took our tax paperwork to H & R Block. That's exactly why I looked into this company for extra work - little did I know, they had training available! So I successfully graduated from that training course after over 130 hours in class training and dozens of practice case studies done.

I am positive, I can teach you how to do your own taxes yourself correctly too. Thank you for checking out my courses!

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I also enjoy teaching Excel productivity hacks. At my job they call me 'Excel Queen'.

I learned everything I know in Excel while working on projects for my jobs since September 1997. From creating graphs for engineers back in Russia, to doing sales analysis for a Consumer Packaged Goods company in the US - I enjoy my Excel projects as they provide challenge to learn more and improve my skills.

The more I learned Excel, the better paying jobs I had. The company I work for regularly sends me to run Excel training sessions in different parts of Southeast US for groups of sales managers. Now I conduct Excel training for the company in class and via webinars.

Teaching is the second nature to me as I graduated from Perm State Humanitarian Pedagogical University (PSHPU) in Russia, which trains students how to be teachers.

I enjoy showing people how they can do the same amount of work in Excel they spend hours, and sometimes days doing, in just minutes. My Excel course came to life because I want more people to work in Excel more efficiently, be less tired at the end of the day so that their families can enjoy them, and they too can enjoy spending time with their loved ones and not be tired of fighting with software which in fact, can be their friend and do their work for them.

I am looking forward to answering the questions you have in discussion forum.

Your success is my goal!

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