Self Employed Tax Help 
5 Facts You Should Know

As a self-employed person, self employed tax help is surely something you might have thought you could do with, at some time or the other. The tax-assessment and liabilities of a self-employed individual will differ from that of an employee.

I know that putting together the paperwork for self-employed taxes can sometimes be a minefield, however you are eligible for certain deductions which will reduce your tax bill to a certain degree, so it's worth doing it right.  

Here are five facts that I think you should be aware of:

couple tring to find out more about self employed tax help

Keep Your Paperwork Up-To-Date

When you are self-employed you have to learn to be self-reliant. You will be responsible for maintaining your own records about expenses and income. You will have to file all relevant receipts in case the IRS selects you for an audit. Self employed tax help is about being well-informed and prepared.

Decide How You Will Pay

The estimated taxes that a self-employed individual will have to pay are based on the amount that he/she thinks will be owed to the IRS when your tax returns are filed.

Once you have worked out the estimated tax liability, ensure that you pay it every quarter. This will prevent penalties and interest from clocking up on your account. It is also a safer option as you are less tempted to spend that money that has been earmarked for taxes. Keep in mind that the amount you are paying is just an estimate and that the actual amount may be higher as well.

Set Aside Tax Money

This is a very important element of self employed tax help. In order to avoid being slapped with a tax bill that you are unable to pay, transfer 20-25% of your income to a separate tax account. That money should be used specifically for paying taxes.

In this manner, you will have set aside the money for paying the self-employment taxes and will not have to borrow from any savings account or source it from anywhere else. Since there is no direct link from this account to your checking account, you will be less tempted to dip into it.

IRA Contribution

Though this is largely not considered for a tax deduction, its benefits are many. As a self-employed person, you will not be able to pay into 401(k). However, saving into a SEP IRA or any other retirement fund allows you to save towards your retirement.

The added advantage is that it is also tax-deductible. 25 percent of your business profits or net, adjusted self-employment income, as a sole proprietor, can be contributed and these are generally 100 percent tax-deductible from all your personal income which is huge benefit for self employed tax help

Utilize Tax Deductions

As an independently employed person, you will also be able to claim some deductions to reduce your tax bill:

  • Home office deductions-for using a home office.
  • Job hunting deductions- membership fees that you pay for job websites or boards are considered to be job-hunting expenses.
  • Unpaid invoices- in the event that some clients don’t pay up, it may be possible to write them off as bad debts.
  • Office supplies deductions- any office supplies that you use for business are deductible. This covers computers and peripherals as well.
  • Tax Services- a large number of self-employed people hire an accountant to deal with their taxes as this helps in avoiding mistakes. These services are tax deductible.

 
Use all these points, make wise investments, comply with the law and learn how to keep your tax at bare minimum levels. You can never be too careful when dealing with taxes. If you are looking for help with your taxes, need further information please consult a qualified expert.

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