One of the best ways to save money and meet your obligations is by paying more attention to your taxes. With a few simple, and most importantly legal, tax hacks, you can enhance your small business in more ways than one. Here are a few tax hacks for the self-employed: Tax Hack 1: Use Tax Filing Tools It s never easy to file taxes being a small business owner: You already have so many things to worry about. But using tax filing software should make it a lot easier. The benefits of using a tax filing tool include: Avoids errors and improve accuracy Keep yourself organized and save timeGives you plenty of safeguards you probably cannot afford otherwise. This first tax hack is an important one: Use tax platforms to accurately file tax returns and enjoy full refunds whenever they apply. If youre looking for an easy way to organize tax deductible business expenses, the free ZenBusiness Money app automatically tracks them for you. It handles invoicing too! Tax Hack 2: Prepare for the Future As a small business owner, you can t take long-term goals lightly. Preparing for tomorrow and staying up to date with tax information will help. Retirement For instance, you should already have set your retirement goals by now, and if you haven t now is the time. In fact, by investing more funds into your retirement today you could end up with handsome tax benefits. Check out IRA tax hacks and harness your taxes with retirement savings. Continued Education Don t stop there. Stay on top of your game by taking courses and workshops that will help you improve your business finances, marketing and stay current on industry best practices. The cost of such training to improve the skill you use in your existing business is a tax deductible expense RELATED: How to Track Tax Deductible Expenses Automatically Tax Hack 3: Keep a financial footprint The obvious one people ignore: Receipts. Don t throw them away yet. Lots of receipts for services and goods are deductible from taxes and can balance your taxable income. Depending on your small business structure, you ll find lots of deductibles you can take advantage of. If keeping paper receipts for months or a whole year is cumbersome, start digital storage for them. Use any of the different apps out there to keep your paper trail digitized by capturing the receipts, storing and organizing them in one unique place. Tax Hack 4: Know your home office deductions Do you operate your small business from home? Do you know it s possible to deduct expenses from it? Yes, you can deduct certain things such as repairs, mortgage interest, internet services and other utilities. To hack this, ascertain the part of your home you ve dedicated to running your small business operations. Tax software can help calculate the amount while the deduction is open for renters and property owners alike. Tax Hack 5: Keep an eye on the tax calendar You should never miss a tax deadline or wait until it s too late to comply with tax laws. However, you could be really busy and hardly remember to keep up with everything. With deadlines always on the horizon, you can rely on free tools provided by the IRS to avoid missing critical tax deadlines. Check out the IRS calendar for businesses and self-employed individuals and you won t miss any tax payment. RELATED: 5 Reasons Small Businesses Should Download ZenBusiness Money Tax Hack 6: Mind your business equipment If your small business purchases equipment, you can make something out of it. Familiarize yourself with Section 179 and Form 4562 to ensure your equipment bought in 12 months is an expense for your budding business. In the long-term, this will be invaluable and will bring much-needed cash savings. Old equipment? Don t sell it yet. Incurring an ordinary loss (by abandoning it) might be a better option because it s fully deductible. Study Section 1231 and ascertain how your old equipment will be classified to make some tax saving from it. Summary From tracking tax deductible items to preparing for the future, small and consistent practices help with taxes. Use these 6 tax hacks for the self-employed, and youll be off to a good start. Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional. Kenneth W. Boyd is a former Certified Public Accountant (CPA) and the author of several of the popular For Dummies books published by John Wiley & Sons including CPA Exam for Dummies and Cost Accounting for Dummies. Ken has gained a wealth of business experience through his previous employment as a CPA, Auditor, Tax Preparer and College Professor. Today, Ken continues to use those finely tuned skills to educate students as a professional writer and teacher. 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Single Member LLC Taxes Tax ID Numbers Start Business For Tax Purposes 6 Tax Tips For Self Employed SMB Tax Deductions Self Employed Tax Mistakes How to File Taxes for LLC Tax Tips For The Self Employed Tax Debt Schemes The Facts K1 Tax Forms IRS W-4 Small Business Tax Tips W2 Prep & Reading Tax Information for LLCs Income Tax Liability: What You Need to Know Quarterly and Annual Tax Filing Do Not Forget These Deductibles SMB Tax Tips for 2022 TINs and 1099s Home Office Telephones Tax Write-Offs for an LLC How To Sell Your Business How are LLCs Taxed? File for a Tax Extension in 2022 Difference 401k & 401a SMB Tax Struggles Estimating Taxes Show All The post 6 Tax Hacks For Small Business Owners and the Self-Employed appeared first on ZenBusiness Inc..
By and large, being self-employed is great. Now that you re the boss, you get to call the shots: you pick your projects, set your hours, and, when business, is booming, you reap the rewards. But every rose has its thorn. And for the self-employed, tax
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