Being self-employed certainly has its perks, such as setting
your own hours and making your own schedule. Unfortunately, though, it also has
its downsides, such as having to pay income taxes on your profits and paying
the self-employment tax. The good news, however, is that you can alleviate (and
in some cases even eliminate) some of these burdens by taking advantage of the
many self-employment tax credits and breaks that are available.
The Home Office Deduction
Do you have a home office? If so, then you may qualify for
the home office deduction. Notice, however, that we said “may;” there are
certain qualifiers that must be met. For example, you can’t use your home
office for anything except business purposes; it must be a room or space used
ONLY for work tasks. It also needs to be the main place from which you conduct
your business
If you meet these basic qualifiers, then your next step is
to literally “size up” your home office; the amount of a deduction you’ll
receive is based on the amount of space your home office takes up.
Itemized Expenses Deduction
You can also save money by itemizing your business expenses,
specifically those related to running your home office. You can include
deductions for things like electricity, internet, and more. It can get a little
tricky figuring out, for example, what percentage of your electricity usage
goes toward your home office and what percentage goes toward your home, but,
with a little help from a professional, this is easier to figure out than you
might imagine.
Travel Deductions
If you have to travel for work, you can deduct things like
the cost of airline tickets, rental vehicle costs, taxi costs, meals eaten “on
the go,” tolls, and hotel bills. Keep all your receipts and bring them to your
accountant; he or she can help you to sort out what qualifies and how to get
your travel-related tax break.
These are just a few of many money-saving deductions you can
qualify for as a self-employed person. Talk to your accountant to learn about
others and to save lots of money on your taxes this year!
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