| Self-employed individuals always cringe at the amount | | | | the losses to taxes in other years which effectively |
| of taxes the pay to the IRS and state. Here are tax | | | | wipes out your tax bill for those years. |
| strategies for self-employed individuals that reduce | | | | Another tax strategy is to look at your side |
| those tax amounts. | | | | businesses. If you have one business, you'll often have |
| Tax Strategies | | | | a second one that is tailored to making some money |
| The good news is being self-employed is one of the | | | | off a personal interest. While you are in it mostly |
| best tax strategies out there. Unlike a salaried | | | | because you like it, you may not realize it qualifies as a |
| employee, the full scope of tax credits and deductions | | | | business and can help you reduce your taxes. Let's |
| available in the tax code are now available to you. The | | | | assume you are primarily a self-employed consultant, |
| key, of course, is understanding the available | | | | but also write travel articles on the side. You may view |
| deductions and organizing your business in a manner | | | | the travel articles as a hobby, but it is in fact a |
| that allows you to maximize the write-offs. | | | | business. If you've sold or even tried to sell any of your |
| The number one tax strategy for self-employed | | | | articles to a publication, all of your expenses related to |
| individuals is to keep receipts for every business | | | | travel writing can be deducted from your taxable |
| expense and write them off. Practically anything can | | | | income. This includes trips and so on. These, |
| be deducted, so do it. Acceptable expenses include | | | | deductions can significantly reduce your taxable |
| cell phone usage, business mileage, office supplies, | | | | income from the consulting business. Make sure to get |
| home office deductions including part of mortgage or | | | | a grasp of your overall business efforts, even if you |
| rent and so on. If you've filed a tax return while | | | | don't really consider them to be a business. |
| self-employed, you are probably already aware of this | | | | Consider employing your children to save on taxes. A |
| so lets move on to more specific tax strategies for | | | | child under 18 that works for you does not have to |
| self-employed individuals. | | | | pay FICA and so on. If the total wages for the year |
| Maximizing you non-capital losses can result in major | | | | are under $4,250, they will pay no taxes and you can |
| tax savings. If your expenses exceed your income for | | | | write off this amount as a legitimate business expense. |
| a year, you obviously will not have to pay taxes for | | | | Of course, the child needs to actually be doing a |
| that year. What most people don't realize, however, is | | | | legitimate business task, but filing and similar manual |
| that such losses can be carried forward for seven | | | | tasks certainly will qualify. |
| years and deducted against future income. | | | | Tax strategies for the self-employed are plentiful. If |
| Alternatively, the same losses can be carried | | | | you are self-employed, consider getting professional |
| backward three years to recover past taxes paid. | | | | help. A good professional will save you thousands |
| The end result of this situation is you can turn a bad | | | | upon thousands of dollars in taxes, more than making |
| business year into an income generator by applying | | | | up for their fees. Oh, you can also deduct their fees! |