Top 10 tax tips for freelancers The ease of communication allowed by modern technology, including the Internet, teleconferencing and mobile communications has led many professionals start working for themselves. These occupations are self-empowered a growing number of coaches, consultants, contractors and professions traditionally managed independent agent. What may have been asked to work independently to complete a main income, has become the main full-time job for many. While this enables workers to set their own hours and being their own boss, it means the self-employed have to meet their own requirements for single tax. Below you can find 10 ways to maximize the money you keep and reduce your taxes.
1. The tip is bigger tax to keep detailed records. Lacking the resources of larger firms to hire someone to monitor your files, it is up to you to keep records of receipts and deductions to maintain depth.
2. Space used for business may be considered as a deduction: If part of your house that you only use for commercial purposes, for example, an office basement or another room to be used as an office, I infer you the percentage of the total space. You can claim this deduction as a percentage of your bills, like rent or utility payments. You can also deduct business expenses from a phone bill, if you use the phone for business calls.
3. Do not forget business expenses: office supplies, shipping and postage, newspaper and magazine subscriptions, professional dues, and other related business items, including computer upgrades and software must be well maintained. The costs incurred during a business trip should also be included. Make sure you keep all receipts.
4. Child Care Deductions: Deductions are allowed by the IRS for all kinds of care provided during business hours. Do not overlook these important deductions, because they can save you a lot of money.
5. creation of pension plans: Develop a retirement plan for self-employed (that is, an IRA SEP) not only for tax purposes, but also to create a body that will serve as your retirement. We can start with as little as $ 100, but if you have $ 2,000 or more, try the Keogh plan option, who can invest his money in savings for retirement and also get the Deferred tax option.
6. Rent in the family: If a family member is an official employee, medical expenses for the whole family can be subtracted.
7. If you need to defer the benefit: When you're self-employed, you may change your billing slightly so you can defer income if you discover that you are in a higher tax bracket.
8. Get your refund FICA: The self-employed are in effect to both employers and employees? Contribution to FICA taxes every time they write their own paycheck. The tax code recognizes that you are allowed to deduct 50% of payments on Form 1040.
9. Before the end of the tax year on December 31st you may need to increase your business expenses to offset your tax deductions. Buy one of few business items that you'll need for the months to come. It is a good option if you find your income you advanced to the next tax bracket. This is one way to reduce your tax burden for the year.
10. Get Tax Help: Get help from a tax person who is very knowledgeable on the issues of self employment for the exact needs.
Posted on February 15, 2010.
