With just under a month left to file taxes, Cheddar News is keying in on freelance workers and wants to provide some tips so those Americans maximize either their refunds or what they have to pay back to the IRS.
Matthew Frankel, CFP and writer at the Motley Fool, joined Cheddar News to dish some insight into what freelancers can expect at filing time and how they can better plan in future filing years to avoid paying huge sums to the government.
"Freelancers are more responsible than the average person for keeping track of their own taxes and part of that requires putting money aside," he said. "It's important to know that you need to set money aside if you're just starting out as a freelancer or you will possibly get caught owing money."
The landscape of the U.S. labor market has shifted since the onset of the pandemic. 39 percent of Americans were freelance workers last year, which was a three percent jump from 2021.
Frankel noted that there are some breaks available to freelance workers that the general public is not allowed to take advantage of. Some of those include home office deductions, retirement accounts, self-employed health insurance and using your own vehicle for work can also be deducted.
"Honestly, the biggest mistake I see is people not asking for help when they need it. Not everyone is certified financial planner or tax attorney or anything like that," he said. "Being disorganized is definitely a big problem. I found this out the hard way early on in my career: to keep important records."
President Donald Trump is talking up a joint venture investing up to $500 billion for infrastructure tied to artificial intelligence by a new partnership formed by OpenAI, Oracle and SoftBank. The new entity, Stargate, will start building out data centers and the electricity generation needed for the further development of the fast-evolving AI in Texas, according to the White House. The initial investment is expected to be $100 billion and could reach five times that sum. While Trump has seized on similar announcements to show that his presidency is boosting the economy, there were already expectations of a massive buildout of data centers and electricity plants needed for the development of AI.
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