Strategies For Limiting Taxes If You Are Your Own Boss

Strategies For Limiting Taxes If You Are Your Own Boss



Strategies For Limiting Taxes If you​ Are Your Own Boss
Self-employed individuals always cringe at​ the​ amount of​ taxes the​ pay to​ the​ IRS and state .​
Here are tax strategies for self-employed individuals that reduce those tax amounts .​

Strategies For Limiting Taxes If you​ Are Your Own Boss
The good news is​ being self-employed is​ one of​ the​ best tax strategies out there .​
Unlike a​ salaried employee,​ the​ full scope of​ tax credits and deductions available in​ the​ tax code are now available to​ you​ .​
The key,​ of​ course,​ is​ understanding the​ available deductions and organizing your business in​ a​ manner that allows you​ to​ maximize the​ write-offs .​

The number one tax strategy for self-employed individuals is​ to​ keep receipts for every business expense and write them off .​
Practically anything can be deducted,​ so do it .​
Acceptable expenses include cell phone usage,​ business mileage,​ office supplies,​ home office deductions including part of​ mortgage or​ rent and so on​ .​
If you’ve filed a​ tax return while self-employed,​ you​ are probably already aware of​ this so lets move on​ to​ more specific tax strategies for self-employed individuals.
Maximizing you​ non-capital losses can result in​ major tax savings .​
If your expenses exceed your income for a​ year,​ you​ obviously will not have to​ pay taxes for that year .​
What most people don’t realize,​ however,​ is​ that such losses can be carried forward for seven years and deducted against future income .​
Alternatively,​ the​ same losses can be carried backward three years to​ recover past taxes paid .​
The end result of​ this situation is​ you​ can turn a​ bad business year into an​ income generator by applying the​ losses to​ taxes in​ other years which effectively wipes out your tax bill for those years .​

Another tax strategy is​ to​ look at​ your side businesses .​
If you​ have one business,​ you’ll often have a​ second one that is​ tailored to​ making some money off a​ personal interest .​
While you​ are in​ it​ mostly because you​ like it,​ you​ may not realize it​ qualifies as​ a​ business and can help you​ reduce your taxes .​
Let’s assume you​ are primarily a​ self-employed consultant,​ but also write travel articles on​ the​ side .​
You may view the​ travel articles as​ a​ hobby,​ but it​ is​ in​ fact a​ business .​
If you’ve sold or​ even tried to​ sell any of​ your articles to​ a​ publication,​ all of​ your expenses related to​ travel writing can be deducted from your taxable income .​
This includes trips and so on​ .​
These,​ deductions can significantly reduce your taxable income from the​ consulting business .​
Make sure to​ get a​ grasp of​ your overall business efforts,​ even if​ you​ don’t really consider them to​ be a​ business .​
Consider employing your children to​ save on​ taxes .​
a​ child under 18 that works for you​ does not have to​ pay FICA and so on​ .​
If the​ total wages for the​ year are under $4,​250,​ they will pay no taxes and you​ can write off this amount as​ a​ legitimate business expense .​
Of course,​ the​ child needs to​ actually be doing a​ legitimate business task,​ but filing and similar manual tasks certainly will qualify .​

Tax strategies for the​ self-employed are plentiful .​
If you​ are self-employed,​ consider getting professional help .​
a​ good professional will save you​ thousands upon thousands of​ dollars in​ taxes,​ more than making up for their fees .​
Oh,​ you​ can also deduct their fees!




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