It is much better than the independent contractor who is obliged to declare his income to adopt the posture soon, avoiding occasional headaches in the future.
How can freelancers declare income tax?
There are two versions available for the income tax return: simplified and complete. See below the characteristics of each one and choose the best way to declare your income tax:
The simplified declaration
As the name implies, this type of income statement is given in a less complicated way than the other version. Here, the idea is to add up all the taxable amounts from the previous year and, from that amount, deduct 20% from the calculation base. The amount for the year 2017 cannot exceed R $ 16,754.34, which is the minimum base used in the calculation of the tax. This model is mainly suitable for those people who do not have a lot of expenses to declare. You can go inside www.taxfyle.com/blog/independent-contractor-taxes and have smart tax submissions done.
The complete statement
The complete statement model includes the detailing of each tax expense, and is the most suitable model for those whose total sum is greater than R $ 16,754.34. Here, it is necessary to declare the expenses with education and health plans, without forgetting the expenses with their dependents.
Choosing the right tax return for you
To choose the best tax model for your IR, there are two options. One is to have the help of an accountant, who will update your accounts, in addition to defining the best way to declare your income.
But if the freelancer decides to make his own declaration, the form filling program (provided by the IRS) will already show several tips and indicate which the best system to be used is. It is a tiring action, but it can be performed if the person has all their monetary data at hand.
It is important to remember that, within the tax declaration form itself, there is a specific area for declaring income from autonomous activities, which also makes the declarant’s life much easier. On these occasions, you need to be clear about how the service was provided.
If the payment has been made on behalf of a legal entity, the field in the form must be completed as normal. If the service was provided to an individual, you need to be aware of whether the charge should have been paid in the month following the month in which you received the amount.
What are the other ways to prove your income?
A independent contractor will need specific documents and notes in order to prove the income he receives. Some of the documents most requested by financial institutions, in addition to income tax, are: the Autonomous Payment Receipt (RPA); o Decorate with DARF (if exempt from income tax return); in addition to bank statements of the past few months or the statement of a union or similar entity.
The income tax return for freelancers can be a good idea, which saves a lot of time in the life of those who want to get a loan or financing. However, contrary to what many people think, not all freelancers need to declare their income to the Lion.
If the person’s income is lower than that established by the Tax Authorities, they can choose to be absent from the declaration. In this way, you will have to prove your income through other documents in banks, such as bank account statements and payment vouchers.