Starting a new business needs a lot of efforts, time and money. You need to have extreme knowledge of different processes and proper understanding of the new taxation regime. According to the new GST regime, all business need to get registered if their annual income is more than 10 lakhs. However, there are various scheme under which they can register their business on the basis of their annual income. The government had taken educational steps to spread the awareness regarding the GST regime by conducting workshops, training, seminars and so on.
If you are a freelancer, you need to be extremely knowledgeable about the new taxation processes, interstate and intrastate transaction that you make with your clients while receiving payments. In this post, we list five taxation tips following which first-time freelancers can gain a competitive edge while securing their payments in 2018. Take a look.
1. Track All Business Finances
One of the most important things that you need to keep in mind is to track all your business finances and the client data. Arrange your data in a way so that you know how many payments have been done in a month. Also, maintain your client list according to the priority of work using a dedicated GST software. Itemizing the business expenses is an amazing way to manage your business data, however, you need to follow the rules of IRS. As you are using your home as an office, it is not easy to calculate the tax separately for the utilities, rent, and insurance.
2. Commit to Solid Recordkeeping
One of the best ways is to manage your taxation invoices in a secure way so that it can be used in future if required. Whether the invoices are a tax, business or income-related, recordkeeping is the best way to manage all the necessary documents and receipts of your business. Recordkeeping will not only help to save your time and reduce your stress in the long run but also help you to focus on your business objective in order to grow more and gain reputation in the competitive freelancing industry.
3. Educate yourself about the Taxes
Before starting your freelancing business, you need to have proper knowledge of all the taxes in the GST regime. In several countries, freelancers have to pay self-employment tax apart from income tax. Therefore, you should be aware of the taxes that you need to pay in India after starting a freelancing business. This way, you will p-prepare yourself for everything beforehand and will reduce the difficulties. You need to have an appropriate taxation GST software that can resolve all your difficulties and manage everything accordingly.
4. Take Advantage of Deductions
If you travel due to your work, you can take advantages of your travel expenses and the deductions. You can avail all your money back that you have spent on traveling, meals, stay and so on. All you need to do is take help of professionals or a software that is able to manage and calculate all your money related expenses. You can file returns using a GST software. Choose a reliable and efficient GST-compliant software that is user-friendly and saves the information that you’ve inputted once.
5. Consider Working with a Tax Professional
One of the best ways to stay focused toward your freelancing business in the coming year is that hire tax professionals and remain free from the taxation issues. The tax professionals as the name suggest are skilled and experienced enough to handle the taxation processes and at the same time, they are extremely knowledgeable in managing the business accounts and finance data. However, it’s advisable to hire a professional who is reliable and efficient in his working capabilities so that he or she can lead your freelancing business forward towards growth by suggesting you effective steps.
As the GST is new in our country, it is important to have appropriate knowledge for GST calculation in India. All you need to do is attend the seminars, workshops and training programs organized by the government to educate people about the GST. Also, you can log in to a GST-related website that can provide you updates and modifications in the GST norms, offer you various tools and application through which you can simplify your finances and accounts. Conduct a research and find out the most about website and GST compliant tools to establish your business in a hassle-free way.