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