Filing taxes presents several challenges for anyone. However, self-employed people must consider additional tax liabilities, potential deductions, record-keeping, and more.
If you feel lost on your self-employment taxes, don’t stress. Reach out for tax preparation service by Odoni Partners in Chicago today. In the meantime, brush up on important tax filing tips and tricks for how to do taxes if you’re self-employed.
Keeping up with a few good tax filing habits throughout the year can keep even the self-employed ahead of their tax responsibilities.
First and foremost: keep your receipts! Receipts provide hard evidence for anything you purchased for your business, including tools, materials, office supplies, and more.
Remember that utilities and rent for office spaces, work vehicles, and other big purchases also may count as deductions during tax filing, so keep these receipts as well and provide them to your tax preparer during tax filing season.
Self-employment tax takes many first-time self-employed people off-guard. Sole proprietors of any business carry the responsibility of paying the employment tax for themselves and many types of paid employees.
When these tax bills come in, many taxpayers find themselves unprepared. Start saving as early as possible to help make your yearly tax burden more manageable. Consider placing up to 30% of your regular income into a savings account for later use.
If you owe more than $1000 in taxes, the IRS suggests making quarterly estimated tax payments to decrease your year-end tax debt burden.
Taxpayers base these payments on what they expect to owe in taxes for the fiscal year, so the amounts necessary for quarterly tax payments may vary.
See the IRS website for a detailed schedule of expected quarterly tax payments, or speak to CPA professionals to learn more.
Working with experienced tax professionals allows the self-employed to ease themselves into filing and paying self-employment taxes. These experts calculate your business income, taxable income, deductions, and more to calculate the amount you’ll owe or receive during your annual return.
Lastly, track all income and business expenses, ideally using an accounting application or program. Keeping detailed records of when these expenses occurred, how much income you received and why, and other important details helps your tax preparers serve you better and protects you during an audit, if necessary.
Working with a tax professional often stands as the best way to learn how to do taxes if you’re self-employed.
Filing taxes seems intimidating, but the process doesn’t need to be stressful. Working with experienced tax professionals like the Odoni Partners team can help you stay ahead of the game and on top of your tax responsibilities.
Learn more about account reconciliation and how to do taxes if you’re self-employed by browsing our blog or call Odoni Partners at 312-440-0960 to schedule your consultation in Chicago today.