Self-Employment Tax Tips
Posted on: 18 August 2018
If you're self-employed or earning some type of income working for yourself, you need to be sure you are claiming that income. If it's over $400 for the year, it has to be claimed on your taxes. Failing to do so can result in tax fines, fees, and other added expenses added to what you owe. It could also mean jail time if you fail to pay or make any type of payment arrangement with the IRS. Read on for self-employment tax tips to help you get your taxes filed.
Hire A Professional
Self-employment taxes can get tricky, especially if you aren't sure about what you're doing. Hiring a professional accountant to do the filing for you can save you the headaches that are bound to happen when attempting to fill out the tax forms yourself. A tax professional will have all of the knowledge of tax laws that you may not be aware of, including what can be deducted to lessen your tax liability.
Save Your Receipts
Save all of the receipts you use to purchase equipment, furniture, and other items associated with your business. If you don't necessarily buy anything for your business, you may be able to deduct other things such as a portion of your mortgage if you use a room in your home solely for your business. Other things such as internet or phone usage may also be deducted. Save your receipts and any bills you get throughout the year to use for deductions. If you aren't sure what can be deducted, just bring in everything you have to your accountant.
Put Away A Portion Of Your Earnings
Everything you earn is not technically your money. You need to put money away to help pay for your taxes. Not doing so could land you in trouble. If you make over $10,000 per year, you may want to think about paying your taxes quarterly to the IRS. This will help prevent you from having to come up with a large sum of money by April 15th and could save you from any tax fees as well. Put away at least 20% of your earnings into a savings account that can be sent to the IRS. You can earn some interest on that money while it sits in the bank until you need to send it off.
There are a lot of pluses to being self-employed, but taxes are not exactly one of them. Hire a professional accountant to file your taxes for you if you are self-employed to ensure it is done correctly. Visit sites like http://www.tri-check.biz for more information.
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