Why you should pay someone to handle your taxes as a freelancer/contractor

Why you should pay someone to handle your taxes as a freelancer/contractor

Managing your taxes is a painful task. And it is even more challenging in the freelance world.

There is no TDS (for good or for worse 😉). There are many sources of income (and expense) and laws to wrap your head around. And then there is your real work of making money 😁

Now before you consider tax filing as your next DIY project, let me convince you why outsourcing these time intensive chores to a professional is a better choice.

💬 Do read till the end (as there is a special 🎁 for you)

💰 Your time is money

Set and enforce an aspirational personal hourly rate. If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it. — Naval (@naval)

Are you aware of section 44ADA and presumptive tax ⁉️

2 years back, I didn’t know that as a contractor I could show 50% of my revenue as profit and pay tax only on the profit. And this without maintaining any bookkeeping or expense receipts (applicable if total gross receipts are less than Rs 50 lakh). But wait !! There are some cons as well.

  1. No further deductions allowed. So if your expenses are more than 50% of your income then you should not opt for this scheme.
  2. If you opt for this scheme, you have to continue filing returns under this scheme for the next 5 years. If you opt out of this scheme for any 1 year then you will not be eligible for this scheme for the subsequent 5 years.

Could you have found this information on our own ? Maybe.

However is it a good use of your time when these rules keep changing every year ? Maybe not.

💩 No HR to keep you accountable

Being the person I am, I always need a reminder to handle my tax chores 😅. And to add to this problem there is a concept of advance tax as well.

Any taxpayer having total taxes due in a year exceeding Rs.10,000/- is required to pay such amount in installments to the income tax department. Such payment of installments is known as payment of advance tax.

There are financial implications here. If you don’t pay the relevant amount by mentioned time limits (except those opting for presumptive taxation u/s 44AD), then you are liable to pay interest under section 234A/B/C.

🛣 Get help down the road

Let’s say an email arrives from the revenue officials asking for something as simple as substantiation of expenses related to a flat you bought. It can be a routine email but if you handle it incorrectly, it can turn into a big deal quickly.

This is where an extra pair of eyes 👀 (and hands) can prevent you from jumping into panic mode 😱. The professional understands the language of IT department and comprehension of tax laws and he will be able to address the query in a much better way than you could ever do.

And not just that, they help you in the verification of your return or keeping a track of your refunds. Further if you are investing in shares or mutual funds, they audit those complex transactions as well.

🤔 How much does a professional cost ?

I have used TaxFino for the last 3 years, and they have provided wonderful services each time.

I recommend these new age startups like TaxFino and Cleartax because they are more professional than your local CA (who might not even be a CA 😛). It doesn’t cost much and there is lot less headache for you.

Thank you for reading 🙌

PS: If you are looking for some help to file your taxes, then there is a very generous offer from TaxFino waiting for you if you join the RemoteIndian community.

 

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