SELF HELP: Self-employed still can save at tax time
Posted By: Matt in Taxes on 05/05/2014 at 07:32:23
My father is self-employed and has been for 40 years, earning his living as a general contractor, building homes and working for himself.
Tax time always was hectic, scrambling around trying to find gas slips or sitting at the dining room table, trying to tally all his expenses from receipts that had seen better days, all the while thinking that there has to be a better way to not only stay organized but save money leading up to April 15.
Turns out, there was.
Maybe dad could have thought a little longer, harder and much broader when it came to realizing just what exactly he could be writing off on his return and not pigeonholing his receipts into one linear way of thinking.
The same could be said for millions of self-employed Americans, those who don't employ the services of a tax professional and determine that they'll tackle their taxes on their own.
Do you even know what write offs apply to you·
Are you sure you haven't forgotten something that is all too common·
Perhaps employing an account isn't in your budget and you really want to take a crack at doing this yourself. Various tax related, online filing resources makes the actual filing aspect fairly simple, and certainly can walk you through the process of entering income and asking to make sure you've written off as many expenses as you deem plausible.
But what exactly are the best write offs that are universally applicable·
One small, but easily overlooked tax deduction is office supplies that you use as part of your employment. Often the business of buying tablets, pens, notebook paper and even the bigger items like computers or tablets gets overlooked either because they're inexpensive or you use them for work and play. You must determine the percentage of work vs. home use, and use accordingly. If it's 70-30, then write it up that way, especially when you're talking about your Mac or PC.
Also, if you work from home, don't forget about partial deductions for your utilities or an office space. You also can look into such staples as cable, phone or internet, again keeping in mind that you must justify usage for work in comparison to how much you use these items personally.
If you're entertaining clients or traveling as part of your job, don't just chalk those up to "cost of doing business." You can deduct meals, mileage and other means of entertainment that are initially coming out of your pocket for the sake of increasing your overall revenue.
The sentiment that surrounds being self-employed in regard to paying income tax is one that is somewhat defeated. You simply assume you're going to have to pay and do an admirable job of piecing together a few deductions but don't really think above and beyond the basics.
Taking that approach isn't advisable and is hardly going to favor your financial standing for the remainder of the year.
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