Being self-employed is a wonderful thing, mainly because it
allows you to do things on your own terms and in your own time. One thing that
you cannot do on your own time, however and unfortunately, is your taxes. Taxes
are one of those things that, like it or not, have definite deadlines, and,
since tax time is upon us, it’s important to make sure that you are properly
managing and making the most of your self-employment taxes. Fortunately, there
are several simple tips that, if followed, can help you to do just that.
Know What Deductions You Can Take
Obviously, the first step in understanding and managing your
deductions is knowing what they are! You should take extra care to find any and
all deductions that your particular business is eligible for. And, since these
do vary greatly from one type of business to the next, it’s a good idea to
either do some serious research and reading and/or to speak with a tax
professional who can analyze and categorize your business and let you know of
all potential tax deductions that are available to you, including those that
you might have overlooked in the past.
Keep Detailed Records
Once you are fully aware of all of the deductions that you
can take and, even more importantly, are taking full advantage of them, then
your next step is to ensure that you are properly recording and keeping
detailed information on each deduction that you take advantage of.
You may want to have a card/account for business related expenses and deductions and/or a software program to help you record them (or both).
If you are not up to all of that work, then you may want to
hire a professional financier to keep track of all of that information for you.
No matter how you go about it, it is crucial to record all
deductions you utilize, as well as general self-employment related monetary
transactions so that you will have both an easy record and easy proof of any
and all information you may need for tax purposes and, if the instance arises,
audit purposes.
As you can see, properly managing self-employment deductions
and, for that matter, self-employment itself, is not that difficult, especially
not with the right professional help, so follow these useful tips to ensure
success.