With the tax season in full force, a self-employed audio engineer no longer needs to dread filling out complicated tax forms by hand. Filing taxes in the past was a huge chore and tedious process for the freelance music producer. Today, completing tax forms is a simple and convenient process when a business owner uses Turbo Tax software. Whether the person makes a living as a music producer or an audio engineer, tax preparation software relieves stress and saves time throughout the year.
Self-Employed Music Producers Need to File Complicated Tax Returns
Entrepreneurs new to the music industry may have fears about filing taxes. In the past, these same individuals were most likely employed at other companies. Employees do not need to fret about deducting their own income taxes, Social Security and Medicare taxes from their paychecks. On the other hand, a self-employed individual no longer relies on another company for withholding required taxes. Paying income tax, Social Security tax and Medicare tax is now the sole responsibility of a self-employed freelancer.
- Self-employment means new responsibilities.
- Entrepreneurs need to pay their own self-employment taxes.
- Turbo Tax software makes tax filing an easy process.
Eliminate the Former Necessity of Filling Out Tax Forms
Instead of filling out complex tax forms, Turbo Tax software asks the tax filer questions about income, expenses and deductions. The professional tax preparation software then completes the forms. After filing taxes for the first time with the help of a reliable software program, a self-employed audio engineer or music producer is amazed at the quick and accurate calculations. Instead of trying to master mathematical feats designed to confuse the best of intellects, self-employed audio engineers can relax and let professional software perform the hard work.
Excellent Tax Software is Programmed to Grasp All Tax Issues
Of course, some software programs are better than others, so it is important to choose the right program. One way to tell if tax software has the capability of comprehending a person’s particular situation is whether the program has the ability to calculate complicated tax forms. Income tax programs are not all created equal. The best software tackles issues such as how to calculate sound equipment and other related expenses. Excellent software eliminates the need to hire a tax accountant because the program basically accomplishes similar results.
Approaching a Music Production Career as a Business
Although it is difficult to know if a new business as an audio engineer is going to yield promising results, it is a good idea to approach self-employment as a business rather than a hobby. A career is not a hobby. A musical hobbyist can only deduct limited expenses. Deducting expenditures is important for music producers because ordinary and necessary expenses constitute potential deductions. The Internal Revenue Service (IRS) poses nine crucial questions to people who are trying to decide if they have hobbies or new careers. One key question is whether the person is engaged in the activity in a businesslike fashion with serious goals to make profits.
Develop a Business Attitude from the Very Beginning of a Career
Besides the tax advantages of regarding freelancing as a business rather than a hobby, attitude makes a difference in achieving success. While it is challenging to venture out into the formerly unknown business world as an independent music producer or audio engineer, it is important to have a positive self-image. At first, family members and friends may mock and criticize. People formerly acknowledged for their encouraging remarks suddenly make discouraging comments. Good acquaintances may vocalize their negative feelings about people who try to earn their bread without working for others.
Learning to Deal with Negative People and Complicated Taxes
In addition to hearing harsh, uncaring words, starting a business is difficult. One of the most disheartening things is to deal with complicated tax issues. For music producers, calculating self-employment taxes means less time spent producing musical achievements. Instead of wasting potentially creative moments caused by serious income tax concerns, self-employed audio engineers need to rely on Turbo Tax preparation software. Professional software makes it possible for artistic temperaments to focus on reaching important goals instead of concentrating on good accounting practices.
Pay Quarterly Estimated Taxes with Tax Preparation Software
Another advantage of using Turbo Tax software is that a music producer can eliminate additional stress by setting up an automatic schedule to pay quarterly taxes. While every person is not going to have enough earnings to warrant mandated quarterly estimated taxes, others may achieve astounding success rates. Audio engineers who used to work at companies did not need to worry about paying quarterly estimated taxes because the money was automatically deducted from their earnings. A self-employed person who exceeds a certain amount of income must pay estimated taxes on a regular basis or risk having to pay a large penalty fee. Another benefit in using a good software program is that the software performs all the calculations for the tax filer.
Filing Required Tax Schedules for the Seriously Astute Music Producer
For the self-employed audio engineer who is wise enough to take advantage of using reliable tax preparation software, life happens every day in a better way. A freelancer needs to list 1099-MISC forms on Schedule C and self-employment tax covering Social Security and Medicare taxes on Schedule SE. Instead of hassling with how to fill out forms created by sophisticated accountants for their personal enjoyment, self-employed individuals should rely on tax software to fill out the monotonous forms. When a person uses excellent tax preparation software, it is easy to keep track of business expenses, freelance earnings and self-employment tax.
Important Tax Forms to Remember:
- Miscellaneous Income Form (1099-MISC)
- Schedule C Profit and Loss From Business
- Schedule SE Self-Employment Tax
Taking a Home Office Deduction has its Fair Share of Pros and Cons
At first glance, the prospect of deducting home office expenses on Form 8829 is exciting. The Internal Revenue Service has certain qualifying rules to determine if a taxpayer has the right to take these deductions. It is beneficial to visit the official Internal Revenue Service website for more detailed information. Although taking home office expense deductions means paying less taxes now, the decision has a downside. Claiming extra deductions equals less Social Security income down the road when a person is ready to retire.
Pay Less Taxes Today or Receive More Social Security Income Later
Some entrepreneurs and freelancers who are eligible to deduct home office expenses prefer to pay extra taxes now so they can reap more Social Security earnings every month when they finally settle down to retire. Speaking about benefits, freelance music producers and audio engineers can decide to continue working past retirement age and receive even more Social Security income. Besides, self-employed individuals never need to retire. Perhaps avoiding retirement at any age is a good way to live a long and prosperous life. For the creative music producer, longevity and Turbo tax simplicity add up to an exciting lifestyle.