Tax preparation can be complex and may be considerably more difficult if you’re self-employed. Teaming up with an expert accountant long before the tax deadlines will help make this procedure more straightforward and cost-effective. You may increase your savings through careful planning and preparation while reducing the stress and confusion of filing taxes.
A Tax Preparation Accountant leverages their expertise to identify all eligible deductions you may overlook. They help accurately and comprehensively prepare your taxes to avoid errors and audits. Beginning months before tax season, they can advise year-end strategies to lower your tax liability. With mastery of the latest tax laws, they ensure compliance and educate on regulatory changes.
At Evolved, LLC, our team of CPAs and accountants specialize in taxes for self-employed clients. We are aware of the particular difficulties that business owners encounter when negotiating the tax system. This article will offer professional guidance to help you with your self-employment taxes.
Track Income and Expenses Throughout the Year
You function as both the employer and the employee when you are self-employed. This implies that you must keep track of every business expense and revenue. Throughout the year, we advise keeping thorough records using spreadsheets or accounting software.
Keep track of all profits, including those from contracts, independent work, and other sources. Keep track of the costs for supplies, home office use, equipment, travel, marketing, and other expenses. This gives you the proof you need to file.
Understand Self-Employment Tax Obligations
FICA tax liabilities are one distinction between employees and the self-employed. While employees and their employers split FICA taxes, self-employed people are responsible for paying 15.3% of Social Security and Medicare taxes.
You need to calculate these taxes correctly to avoid fines. Resources on self-employment tax requirements are available from the IRS. We can verify your calculations at Evolved, LLC, to ensure you comply.
Expense Deductions Can Lower Tax Burden
You can write off some of your legitimate company costs to reduce your taxable income if you’re self-employed. Keep tabs on expenditures like supplies, equipment, meals, vacation, vehicles, health insurance, retirement contributions, and more. We advise speaking with a CPA to see what can be deducted as a business cost. With the correct paperwork, we can maximize your allowable deductions.
Home Office Deduction has Specific Rules
Since many business owners operate from their homes, they can claim the home office deduction. The IRS has guidelines for using a specific area of your home exclusively and frequently for business purposes. Keep track of your home office costs, such as rent, utilities, internet access, furniture, supplies, and equipment. Determine the proportion of your home that is used for work. If you meet the criteria to claim this deduction, we can help you find out.
Consider Hiring Employees as Your Business Grows
As your business grows, consider adding staff. You can provide employee benefits and be eligible for tax credits by hiring W-2 workers. You could offer health insurance while claiming the Small Business Health Care Tax Credit. Additionally, hiring staff lowers your tax liability for self-employment. We can advise you on the tax repercussions of hiring personnel because we are accountants.
Work with a Tax Preparation Accountant to File Your Taxes Correctly
Working with a CPA is particularly beneficial in light of the complexity of self-employed taxes. Our accountants at Evolved, LLC, are tax experts for business owners, independent contractors, consultants, and other self-employed professionals. We will make sure you file correctly.
Our services consist of:
- Complete tax preparation
- Tax planning
- Deduction maximization
- Calculating your quarterly estimated taxes
- Audit assistance
- Business structure advice
Avoid becoming overburdened by the difficulties of self-employed tax preparation. So that you can concentrate on what you do best—building and expanding your business—trust the professionals at Evolved, LLC to traverse this terrain on your behalf. Remember that tax compliance is a strategic investment in your journey as a self-employed person, not merely a financial obligation.