Freelance business comes with many perks, from flexibility to freedom and self-management. But with these perks also comes great responsibility — keeping track of your finances to ensure everything is in order during tax payment.

For many freelancers, bookkeeping can be a daunting task. But you cannot afford to avoid this aspect of your business if you want to be successful in the long run. Fortunately, there are some steps you can take to make the accounting process a bit easier — and even help you save money in the process.

Take Your Business Seriously

Being a freelancer does not make what you do less of a business. On the contrary — because you don't have the safety net of a regular paycheck, you should take your freelance business seriously and keep good records from the start.

Set up a system for tracking your income and expenses, and ensure you always deposit payments into your business account rather than your personal account.

For instance, if you are a creative writer, you might want to keep track of the different projects you work on and how much each one pays. This step will help you stay organized and get a better sense of which projects are worth your time.

Also, track all your income and expenses, and keep all receipts and invoices safe. This step will make it much easier to prepare your taxes come tax time.

If you use accounting software, back up your data regularly. This way, you won't lose all of your essential financial information if anything happens to your computer.

Get Familiar with the Different Types of Taxes

You are responsible for paying your own taxes when you are a freelancer. As such, familiarize yourself with the different types of taxes that may apply to your business —- including income tax, self-employment tax, and value-added tax .

Income tax is the most common type of tax. This tax is based on the total amount of money you earn from freelance work over a year.

Self-employment tax is also prevalent among freelancers since most of the freelancers fall under the self-employed category. This tax covers Social Security and Medicare and is calculated based on your net earnings from self-employment.

Value-added tax (VAT) is a consumption tax applied to certain goods and services in some countries. If you are registered for VAT, you will need to charge this tax on all invoices issued to customers — and then pay the tax collected to the government.

Put the Tax Money Aside

A good rule of thumb is to set aside 30 percent of each payment from clients for taxes. This portion may seem like a lot, but it is better to overestimate your tax liability than underestimate the amount.

If you don't have enough money set aside when the time to pay taxes comes, you may be subject to penalties and interest charges — which can quickly add up.

If you can, pay your taxes quarterly. This tip eliminates the burden of a large tax bill once a year and can help you avoid penalties and

interest charges.

Hire an Accountant

If the thought of doing your taxes gives you anxiety, a professional accountant can help you out. While this tip may seem like an expense, an accountant can save you money in the long run by ensuring your taxes are done correctly. Moreover, an accountant will help you take advantage of any deductions or credits you may be eligible for.

Additionally, an accountant can help you plan for upcoming tax payments and ensure you are setting enough money aside.

You can count on us at Bliss & Skeen, CPAs, to help you with all your accounting needs. We are familiar with accounting and tax laws and can help you plan for a successful future. Contact us to set up an appointment.