Every year, Freelancers have an important list of dates to remember and act on, primarily those related to tax filings, retirement account management and health insurance plan enrollment. To help you stay organized, I’ve compiled this date planner that brings together all deadlines into one document that you can bookmark, copy into your calendar or even print out and post on your refrigerator.
January 31, 2019: 1099-MISC due to contractors
Those who hired Freelancers (independent contractors) to whom they paid $600 or more in the previous year must send 1099-MISC forms by January 31, 2019. If a client paid you less than $600, then you probably will not be mailed a 1099-MISC, although the IRS nevertheless requires you to report all income.
Do keep scrupulous records of who owes you a 1099-MISC so that you can accurately report your income on your tax return. Your clients will also send 1099-MISC data re: you to the IRS and any differences between your numbers and the clients’ could trigger an audit. If you haven’t received a 1099-MISC from a client by January 31, contact your client ASAP and request a re-send.
If you used any subcontractors to whom you paid at least $600 last year, you must likewise send them a 1099-MISC by January 31.
April 15, 2019: Individual income tax filing deadline
You have until April 15, 2019 to file your Form 1040 individual income tax return for 2018. Be aware that April 15 isn’t the deadline to pay your taxes — tax payments for Freelancers are due on a quarterly schedule (see 2019 quarterly estimated tax deadlines, below). If you wait until the tax filing deadline to pay your taxes, the IRS may charge you penalties and interest on top of the tax you owe.
If you’re still waiting for information, or you’re too busy to file a return by April 15, you may apply for a six-month extension that gives you until October 15, 2019 to file. The extension application needs to be filed by April 15, 2019. Remember again that the extension is for filing, not paying your taxes. Payments are still due on the quarterly schedule no matter when you file and penalties and interest can accumulate if you wait to pay.
QUARTERLY TAX FILING DATES
The IRS requires business owners to pay income taxes on a quarterly schedule. This may seem like a hassle, but it’s easier to pay in four installments than to try and come up with a whole year’s worth of income taxes all at once.
Here are the 2019 deadlines for quarterly estimated tax payments. Note that the four quarters are not of equal lengths: the 2nd Quarter covers only April and May, while the 4th Quarter covers the last four months of the year.
DEADLINE PERIOD COVERED
April 15, 2019 January 1 – March 31, 2019
June 17, 2019 April 1 – May 31, 2019
September 16, 2019 June 1 – August 31, 2019
January 15, 2020 September 1 – December 31, 2019
April 15, 2019: Deadline to set up and contribute to an IRA for 2018
Even if you made no contributions to your retirement savings account in 2018, you can still make a 2018 contribution to an IRA up until April 15, 2019. This includes traditional, Roth and SEP IRAs. You can also make 2019 contributions to these plans from now up until next year’s tax filing deadline of April 15, 2020.
December 31, 2019: Deadline to set up an individual 401(K)
An individual 401(K) is another type of plan that Freelancers can use to save for retirement. One important detail is that an individual 401(K) must be established by December 31st of the first plan year (as opposed to an IRA, which can be opened up until April 15 of the following year). That means it’s too late to set up an individual 401(K) for 2018, but you may set one up for 2019.
Contribution limits 2019 update:
Solo 401(K) Employer: 20% of net self-employment income Employee: 100 % of earned income up to $19,000 (for age 50 years +, up to $25,000) Total combined contribution: $56,000
Traditional or Roth 401(K) $6000 annually $7000 if age 50 years +
SEP IRA The lesser of 20% of net self-employment income, or $56,000 annually
The open enrollment dates to purchase health insurance for 2020 on the Affordable Care Act exchange will be November 1 – December 15, 2019. Open enrollment for 2020 through the national health insurance exchange will also be run from November 1 – December 15, 2019.
Thanks for reading,