Q2 Estimated Tax Deadline Looms; However, Study Finds Only 38% of Freelancers Pay Quarterly Taxes
The penalties for not filing returns and paying taxes owed can be up to 5% of an unpaid tax bill each month, which can take its toll on freelancers—most of whom, according to the study, are less stable financially than other taxpayers, and carry unsecured debt.
The report, "Measuring the
- 63% of freelancers feel they are "unstable" or "just getting by" financially.
- Only 43% of freelancers are confident about their overall financial future.
- 64% of freelancers carry debt, and of those debtholders, 56% have unsecured debt.
- A mere 37% of freelancers would be able to handle a major unexpected expense well.
- Only 40% of freelancers are "very comfortable" or "somewhat comfortable" with their current retirement savings plans.
When it comes to tax preparedness, the study found that 59% of freelancers are confident with their tax deductions, but only 38% of freelancers expect to file a separate business tax return.
"The research clearly shows that the majority of freelancers are in greater need of financial guidance than members of the workforce with more traditional income," said
TaxAct recently rolled out a series of enhancements available within its TaxAct®
The study from Ipsos Marketing also includes interesting findings about freelancers based on their professions and living arrangements, such as:
- Consultants and Web/software developers are more likely to make quarterly payments to the
IRSand feel confident about tax deductions.
- Freelancers who are homeowners tend to earn a higher income, are more likely to be in cohabitating relationships, and have a more positive outlook on their financial futures.
- Consultants and Web/software developers earn a higher income from their primary income sources, while writers and bloggers earn less.
- In addition to earning a higher income, Web/software developers also tend to have more positive financial outlooks, are more likely to add to retirement accounts, and are better equipped to handle unexpected expenses.
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About the Study
These are the findings from an
JConnelly for TaxAct
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