Independent Contractor Accounting Services
Our accounting services are designed and centered around your type of business. Whether you’re a business owner with multiple team members or are a sole proprietor, we specialize in servicing independent contractors with all of your accounting needs.
01
Bookkeeping
Self-employed or not, you need to monitor what’s going in and out of your bank accounts. Our bookkeepers will develop an easy framework when setting up your books. There are a lot of business expenses that independent contractors need to keep track of in order to pay the least possible income tax. Our professionals advise independent contractors on accounting best practices that save time and money.
02
Tax Preparation
Do you not have enough time to manage your own tax payments? We got you covered. Our team will file your tax return based on your books, records and any additional information you provide. Our tax professionals decipher between all of your expenses and determine what tax is deductible or not. We then combine all of your information and prepare all necessary forms and schedules.
03
CFO Services
Make smarter decisions with the help of our CFO services. This service is designed to help independent contractors predict their customer demand and be prepared for it. Our part-time CFOs, take the data from your books, employ financial analysis, to project your future sales. Part-time CFO services also include budgets and overall financial guidance.
Why Do Independent Contractors Need Accounting?
The line between independent contractor and employee is often blurred. So what is the difference between the two?
In general, an individual or business is considered an independent contractor if they provide products or services under either a written contract or verbal agreement. You can also call them freelancers as they are not paid on a regular basis unlike full time employees. And while most of the independent contractors choose sole-proprietorship, others opt to establish their own LLC or S-Corp.
The line between independent contractor and employee is often blurred. So what is the difference between the two?
In general, an individual or business is considered an independent contractor if they provide products or services under either a written contract or verbal agreement. You can also call them freelancers as they are not paid on a regular basis unlike full time employees. And while most of the independent contractors choose sole-proprietorship, others opt to establish their own LLC or S-Corp.
Meanwhile in relevance to the financial aspect, when it comes to employees, the company is obligated to withhold the income tax, social security and Medicare taxes from the wages being paid. On the other hand, the company doesn’t withhold these taxes for independent contractors. These expenses that would normally be covered by an employer are passed to the independent contractor.
That’s why in order to leverage these expenses on a tax return, proper records and receipts must be kept up with. And the only way to accurately accomplish this self-employment taxes is by having independent contractor accounting.
Over the years, independent contractors are constantly under scrutiny of the IRS. Because of incorrectly filed information, many of them are imposed penalties, fees, and interest. Don’t let this be you. Our group of CPAs, tax consultants, and IRS experts will help you avoid unwanted IRS attention.
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Benefits Of Independent Contractor Accounting
By prioritizing your accounting as an independent contractor, you will be able to take more control over your finances. Specifically, you’ll be able to:
Manage cash flow better, especially if you run your own business
Correctly identify which expenses are tax deductible
Keep up with receipts and expenses by having a streamlined accounting system
Ensure that you are in good standing with the IRS
WHY LYFE ACCOUNTING IS
THE PERFECT CHOICE
FOR YOUR INDEPENDENT CONTRACTOR
ACCOUNTING
THE PERFECT CHOICE
FOR YOUR INDEPENDENT CONTRACTOR
ACCOUNTING
Schedule a Free Consultation Today.
Key Accounting Considerations
for Independent Contractors
for Independent Contractors
Being an independent contractor is significantly different from a traditional employee. Our services will help you navigate those differences in the most advantageous way. Some considerations are:
→ Any income you received or earned is not considered salary or wages. Instead, it is business income and is treated differently.
→ You can make an unlimited amount of legitimate tax deductions, but you must keep good records of those purchases in case of an IRS audit.
→ As an independent contractor, you receive 1099s at the beginning of the year for the previous calendar year. The income on each 1099 is reported to the IRS, meaning any discrepancy on your tax return is likely to raise some red flags.
Being an independent contractor is significantly different from a traditional employee. Our services will help you navigate those differences in the most advantageous way. Some considerations are:
→ Any income you received or earned is not considered salary or wages. Instead, it is business income and is treated differently.
→ You can make an unlimited amount of legitimate tax deductions, but you must keep good records of those purchases in case of an IRS audit.
→ As an independent contractor, you receive 1099s at the beginning of the year for the previous calendar year. The income on each 1099 is reported to the IRS, meaning any discrepancy on your tax return is likely to raise some red flags.
Our Methods To Independent Contractor Accounting
Catch Up Your Books
Accounting is all about being up-to-date with your financial records. Once you sign up for our services, we will take the time to catch up your books to the present month.
Set Up Chart of Accounts
Next up is setting up your chart of accounts. Doing this process will help reviewing your financial statements easier and make filing your tax return, federal tax, payroll taxes a breeze.
Data Entry
We gather data. Whether you use Paypal or a credit card processor, we incorporate that information into your books. We will also connect your financial accounts to your bookkeeping software and begin data entry. These bookkeeping software includes QuickBooks, Xero, FreshBooks, and etc.
Reconciliation
After we’re done with the steps above, it’s time to double check the figures. To ensure accuracy on your financial statements and ultimately your tax return, we will reconcile your accounts.
Reporting
Finally, it’s time to prepare your financial statements. These financial statements include your income statements and balance sheets.
Use Insights
One of the main reasons why it’s better to have accurate financial records is to have a guide with your next move either as an independent contractor or as a business entity. We will help you use your reports and KPIs to make informed, profitable decisions.
Take the Next Step Toward Managing Your Finances and Being in Control
LYFE Accounting has extensive experience in servicing independent contractors. We manage books, file tax returns and project and budget future sales and expenses. We possess the capacity to service your company’s financial needs.
Accounting and taxes are not optional. Don’t waste your time finding a bookkeeper and a tax preparer. We offer both, in-house.
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CLIENT TESTIMONIAL
“I had an awesome experience at LYFE Accounting. My accountant was really knowledgeable & professional. She got me the maximum refund possible…I would recommend LYFE Accounting to any & everyone.”
– P. Griffin
