Self-Employed? Here are Tax Tips to Save You Money!
Being self-employed comes with a whole host of tax-related advantages and savings. In fact, being self-employed is considered by many to be the best tax strategy of our time.
But if you want to keep Uncle Sam from reaching too far into your wallet, you have to know the right moves. And that is what it's all about. Knowing your stuff!
Following are some tips for making the most of your self-employed status:
If you can file papers in a filing cabinet, then you are half way to one of the most important steps in self-employment. Keeping your records. Receipts, ledgers, any and all documents related to your business need to be filed where they can be found to support tax deductions and credits.
Your children can even be the means of saving money. Childcare credit is for those who are self-employed as much as for regular go-to-work folks. Use childcare as you need it to be able to run your business, document it, and take the credit. You earned it!
But your children can not only save you money, you can help them earn money. Why not let them be involved in your business with you. Pay them a fair wage, then deduct their wages, bonuses and even fringe bonuses on your taxes. Good, huh?
How can I let my house pay for my business? Well, at least let your household bills pay for your business. You just figure out how much space you use in your house for your business, figure the proportion that is of your total house, then use that same proportion to deduct part of your utilities, mortgage or rent, property taxes, etc.
You can even carry forward unused expenses to the next year. Again, here's where accurate records pay off. This tip can help you reduce your income (and taxes against it including self-employment tax.)
Remember that little trip to make the bank deposit? If you're self-employed, that trip is a tax deduction. Your car is a business tool when you are self-employed. In other words, it's a money maker, to help you pay less taxes.
The Internal Revenue Service (IRS) is very aware of the many tax advantages of self-employment, thus it is an area they are subject to keeping closer tabs on. So, you need to be aware of the latest changes in Tax Law for small/home businesses.
Comments are closed.
