Three Keys For Tax Obligations Of The Self-Employed
When you are a freelance professional, it is completely up to you to get a grip on your taxes. For that reason, you need to be proactive about how you handle these obligations. There are a number of factors that you need to keep in mind so that your taxes are properly handled and on your terms. Read the guidelines below and use them so that you can file your taxes and keep your self employed business in order.
Set Up Your Home Office
One of the most practical things you should do as a self-employed person is set up a home office space. This allows you to not only take yourself serious as a business professional, but enjoy the tax benefits that come with the territory. There are some considerations you must keep in mind about this office. For one, it should only be used for business purposes and you should be able to prove as such if an audit occurs. You also must know the square footage of the business office in relation to the rest of your home. It is this calculation that will allow you to use and deduct a percentage of your rent payment or mortgage. This home office is a must-have for any self-employed professional.
Remember Your Self-Employed Tax
One of the many pitfalls that some self-employed people find themselves in is forgetting about the self-employed tax. This can eat up a large portion of your earnings, depending on how you go about it. For that reason, you should always set aside enough money to handle this factor once filing time rolls around. Set aside money for taxes in an interest-bearing savings account so that the money grows in time to file your return.
Hire A Tax Professional
The best thing you can do for yourself if you are self-employed is to hire a tax professional to assist you. They will set up plans and accounts for you to streamline the process so that you are not caught off guard later. This includes filing estimated taxes in January, April, June and September. These professionals will work with you year-round to keep you abreast of any changes in tax law on both the state and federal level. They will also be readily available for you if you face an audit or other such circumstances.
Consider these tips and use them as you set out to handle your taxes and hire a tax preparation service, such as from Bauer & Associates LTD.