Choosing the right software for your tax issues is one of the most important things to handle tax processes efficiently, easily and safely. As a freelancer, you need to be aware of regulations, tax rates, global rates and all the tax procedures that need to be applied.
TurboTax and QuickBooks are two popular options that cater to different needs, each offering distinct features and benefits. We will discover both of them in a details way in this post;
TurboTax for Freelancers
TurboTax, developed by Intuit, is primarily known for its tax preparation and filing services. It's widely used by individuals and small business owners for its ease of use and comprehensive tax solutions. Here’s why TurboTax might be a good choice for freelancers:
1. Tax Filing Focus: TurboTax excels in tax preparation and filing. It provides a guided, step-by-step process that simplifies the complexities of filing your taxes. For freelancers, TurboTax offers specialized features, including the ability to deduct business expenses, track income, and handle deductions specific to self-employment. The software also offers a range of plans tailored to different needs, from simple returns to more complex filings involving multiple income streams.
2. Simple Use: One of TurboTax’s strengths is its user-friendly interface. The software is designed to be intuitive, making it accessible even if you’re not a tax expert. It provides helpful prompts and explanations throughout the filing process, reducing the likelihood of errors. TurboTax also includes features like document importation, which can save time by automatically importing W-2s and other tax documents.
3. Maximized Deductions: TurboTax is known for its ability to maximize deductions and credits. For freelancers, this means you can easily identify and claim all eligible deductions related to your business, such as home office expenses, mileage, and software subscriptions. The software also offers a deduction finder that searches for applicable deductions based on your responses.
4. Support and Guidance: TurboTax offers a range of support options, including access to tax professionals for more complex questions. If you choose the highest-tier plan, you can get on-demand support from a CPA or EA, providing added peace of mind during the tax filing process. TurboTax also provides audit support and guidance if you face any issues with the IRS.
5. Cost: TurboTax’s pricing varies based on the complexity of your return and the level of support you need. While it can be more expensive compared to other tax software, many freelancers find the cost worthwhile for the comprehensive features and ease of use. TurboTax often provides a free version for simple tax returns, but the more advanced features suitable for freelancers are typically found in paid versions.
QuickBooks for Freelancers
QuickBooks is an accounting software. It helps businesses and freelancers to manage their financial data.
1.Detailed Financial Management: QuickBooks helps freelancers track income and expenses, generate invoices, manage receipts, and reconcile bank statements. This comprehensive approach to financial management can make tax preparation easier by ensuring all your financial data is organized and up-to-date.
2. Expense Tracking: One of QuickBooks’ key features is its robust expense tracking. You can categorize expenses, attach receipts, and monitor spending throughout the year. This ongoing tracking ensures that when tax season arrives, you have a clear record of all deductible expenses, which can simplify the tax filing process and help you maximize your deductions.
3. Income Tracking and Invoicing: QuickBooks also excels in income tracking and invoicing. Freelancers can generate professional invoices, track payments, and manage client accounts. This functionality helps ensure you keep on top of your income streams and client payments, which can be invaluable when preparing for tax season.
4. Integration with Tax Software: For those who prefer to use QuickBooks for financial management but need tax filing assistance, QuickBooks integrates seamlessly with TurboTax. This integration allows for easy transfer of financial data from QuickBooks to TurboTax, reducing manual data entry and minimizing errors during tax preparation.
5. Cost: QuickBooks offers several pricing tiers, ranging from basic plans suitable for freelancers to more advanced plans for growing businesses. While it’s generally more affordable than TurboTax for financial management, the cost can add up if you opt for advanced features or additional users. However, the investment in QuickBooks can be worthwhile for the ongoing financial management benefits it provides throughout the year.
Making money as a digital nomad is sometimes challenging because of the regulations and lack of experience. It is important to use accurate tools in order to stay on the safe side of the law, maintain the flow of income and stabilize finances. Getting paid as a freelancer easily needs an organized tracking system and right payment tools, especially for those who work with clients globally.
Ruul: Game Changer For Freelancers
Ruul, as your Merchant of Record, is the legal entity selling your professional services to your business clients compliantly in 190 countries. Ruul allows freelancers to sell their digital services to businesses anywhere around the world.
Ruul handles all your sales tax and compliance for every payment, cutting down your paperwork also it handles global sales tax charging and remittance.
Ruul makes receiving payments extremely easy by allowing quick payment collection. With Ruul early pay out is pretty simple, because freelancers can receive payout in their preferred account in 1 business day.
