Tax Tips for Self-Employed Individuals
Tax is something that everyone dreads when they are self-employed. The responsibility is far greater than it is when you are a contracted employee because the onus is on you to do the work and to make sure you get it spot on.
But it’s not always as scary as it sounds and there are ways to make it easier and less stressful. In fact, the digital age has made filing your taxes as easy as it could be, so take these tips onboard the next time you find yourself stressing about your taxes.
1. Use Software
There are a number of programs out there that can help you file your taxes. TurboTax is one of the most popular of these, but it’s far from the only one. These programs connect to your bank accounts and they can sync with your phone and other devices. Every time you make a payment from your business or receive earnings into it, it will log it.
This ensure that your taxes are being completed steadily and automatically, which in turn means you only need to click a few buttons at the end of the year. Just make sure that the software you use can actually help you with your situation, as its main purpose is to help those with a simple set of circumstances and the basic settings might not be applicable to you.
2. Do Not Be Late
Whatever you do, make sure you get your taxes filed on time as the penalties for not doing so can be huge. If you have already missed them, however, then there might be some damage limitation that you can do. The absolute worst thing you can do is to just ignore the situation and hope it will go away, because it won’t. Check the link below for more information.
I forgot to file my taxes, what happens now?
3. Know the Rules
Just because you received certain exemptions one year does not mean you will be able to get the same ones the next year. The tax code changes and in recent years limitations have been placed on what can be claimed and what can not. You need to stay up-to-date with these changes because if you do not then you may file an incorrect return, which could result in you being penalized.
Make sure you double-check everything on your form. Some of the most common mistakes on tax forms include incorrect Social Security numbers, names and addresses. It’s basic information so we don’t pay attention to it after we input it. This means that we tend to overlook any mistakes we make, drastically slowing the process down and potentially stopping refunds from being paid when they should.
5. Budget for an Accountant
If you’re struggling with all of the above and you have a little money to spare, consider hiring an accountant. This is what they do for a living and not only can they take the stress out of the situation but they can also save you a lot of money. They know exactly what needs to be done and they require very little input from you.
You don’t need to have an accountant on staff all year long, so don’t worry about paying them a huge salary. You just need someone who can file your taxes for you at the end of the year. Look for freelancers through platforms like Upwork if you can’t quite afford the rates being quoted by locals; just make sure that you check the credentials of any accountant you hire.
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