Sunday, January 14, 2007

I finished my 2006 tax returns!


Earlier this afternoon, Michael started putting his tax returns together. This got me started, and I ended up completely finished my tax returns for the 2006. It took me about six hours, but they're all finished!

I've blogged about several income tax-related subjects before: tax deductions for freelancers, a basic overview of the process, the self-employment tax, and estimated tax prepayments. Because I have discussed all of this before, and because I am writing several articles on the subject on Write-From-Home.com, all I will do here tonight is give a brief overview. I feel I know the subject much better now that I've done it a second time, especially since it's fresh in my mind, so I just want to provide a few quick pointers.

Forms you'll need:
1040
1040 Schedule C or C-EZ (Profit or Loss from Business)
1040-SE (Self-Employment Tax)
4562 (Depreciation and Amortization - for expensing business equipment)
8829 (Expenses for Business Use of Your Home - for claiming the home office deduction, which I don't recommend)

Important reminder:
If you pay quarterly estimated tax prepayments, the final one is due tomorrow, January 15th. However, you don't have to pay it if you are going to file your taxes by January 31st (and pay the remainder that you owe).

I was lucky enough that I estimated almost exactly what my income for the year would be, so all I owed was a tidy $16. I also learned a few new things about the categories that business expenses fall under - when I filed my 2005 return, I had not been freelancing very seriously for much of the year, so I didn't have a very exhaustive list of business expenses. This year I did. Also, last year I didn't have to pay a self-employment tax, which I did this year.

And...that's all I'm going to say for now. My articles on filing income taxes as a freelance writer should appear on Write-From-Home.com soon, so you'll be able to refer to them when you're doing your own taxes (unless you're like me, and have them done already). I'll post in my blog and link to the articles when they're live.

2 comments:

Unknown said...

I filed my tax return with an awesome website called www.expresstaxrefund.com. The process was painless and I was done with my return within 1 hour of starting the process. It gave me a calculation of my refund and a preview of my 1040 all for free. You should definitely try checking it out!

Katharine Swan said...

Thanks for the comment (or should I say spam?). As you may have noticed if you'd read my post (or even the title), I already filed mine. Also, I am a big-time do-it-yourselfer - I'd rather spend 6 hours of my own time and know how it's done, then 1 hour and be clueless. I'm sure not all of my readers feel the same, but I doubt they are so lacking in common sense that they would trust their standing with the IRS to someone based on a random referral.

I'm also not so sure you read my blog to fully appreciate the issue here. I am a freelancer, not someone's employee, which means I am self-employed. Saying it took you one hour to file an average tax return on this site while it took me six hours to file a small business tax return manually is comparing apples to oranges. It may all be fruit, but there's a lot more work involved in order to eat an orange.