challenges for tax payers Minneapolis, MN
It’s tax time again and there are a lot of factors that can impact your tax returns. If you haven’t filed yet, don’t wait for March or April. Now is the time to start the process. There are some challenges that taxpayers can run into especially if they are new freelancers or self-employed. Read on for some common challenges to be aware of and possibly avoid.

Omitting Multiple Income Streams

With an ever-increasing gig economy, more persons have multiple streams of taxable income. Whether you are W-2 or 1099, it is important to include all streams when filing taxes. Failure to do so may run you the risk of penalties.

Not Filing Quarterly Taxes

Freelancers are required to make estimated quarterly payments. Some freelancers do not know that that they are required to do this, nor do they know how or when to make the payments. Failure to pay quarterly payments will result in a hefty tax bill come April which may include additional late and interest fees.

Make sure that you do not underpay your estimated quarterly tax payments. While it is an estimate based on how much you may make for the year, it’s better to overpay by a little than underpay by a lot. For more information on self-employment and taxes, visit the IRS website.

No Health Insurance Coverage

Under the Affordable Care Act, the individual mandate penalty required that persons should have qualifying health insurance coverage. If persons were unable to prove that they had health insurance, they are required to pay a penalty with taxes. While this federal penalty was suspended from the tax year 2019, be sure to do your research as some states still have state-based penalties.

If you haven’t filed yet, the time to start filing is now! At MWB Tax Solutions, we can help you get it done in time so give us a call or message us.