Whatever the boss-man says goes, especially when the boss is you!
Being self-employed comes with a lot of benefits. When it comes to filing taxes as self-employed, however, it may get a little overwhelming. Here are six tips to help you self-employers out there:
ONE: How to file
“Sole Proprietors” and “Independent Contractors” are two types of self-employment. A good source to define each is the IRS itself, click here for their self-employment FAQ.
TWO: Estimate your tax
Self-employed tax payers typically need to make quarterly estimated tax payments.
THREE: Schedule C or C-EZ
If you are self-employed, you need to file a Schedule C or Schedule C-EZ with your Form 1040. Each form provides instructions for which form to use. Any questions? Just ask us.
FOUR: Check for both taxes
For those who are making a profit, self-employment and income tax might need to be paid. The self-employment tax would include Social Security and Medicare taxes.
FIVE: Deductions!
Taxpayers that are self-employed can deduct expenses that are needed to run a business that are common. These would be things that are ordinary and accepted in the industry you work in. Check out our blog post here for a break down of what would qualify as tax write-offs.
SIX: When to deduct those deductions
Typically, you can deduct expenses in the year paid or incurred. Some may need to be “capitalized”, or deducting the cost over a number of years.
