10 Tax Tips For Self-Employed

This 10 tax tips for self-employed people will help make your tax experience much easier. Because you are self-employed, your tax return is going to be different from others. The forms you will use will not be the same as those for filing personal tax returns, and you will also have to file additional forms that would not be needed in a personal tax return.

If you remember the 10 tax tips below, however, filing your tax return should be no more difficult just because you are self-employed than it would be otherwise.

1. Because you are self-employed, the IRS defines your employment status differently than that of those who are employed for someone else. Therefore, you must make sure you fit the IRS definition of “self-employed”.

2. You may find that you are responsible for handling all the paperwork related to your business because you are self-employed. Part of this paperwork involves reporting taxes. Therefore, reporting your taxes quarterly may be easier than making one big year-end tax return.

3. Make sure you are reporting all income and paying all necessary taxes. This is your responsibility, and no one else’s, because you are self-employed.

4. Electronic filing may be something you want to consider. It may be easier, and will cut down on the amount of actual paper that you have to keep up with and file.

5. Consider having a professional prepare your tax return. In fact, because you are self-employed, you might want to consider letting a Certified Professional Accountant (CPA) to do this for you. It just might be worth the slightly higher preparation fee you may be required to pay.

6. If you are preparing your own tax return, make sure you have the right forms. Personal tax return forms are different, and will not apply to tax forms for self-employment. This may be another reason to consider a CPA. He or she will know which forms need to be filed.

7. Check your math if you are preparing your forms yourself. Just as with personal tax return forms, the IRS reports that mathematical errors are the main reason tax return forms are sent back each year.

8. Whether preparing your tax return forms yourself or someone else does it, you still need to make sure all information relating to your business is correct and has been entered accurately on your return form.

9. Make a copy of your tax return for yourself before mailing it, if doing your own filing. You will need one for your records.

10. Send your return by certified mail, return receipt requested. This will give you a way to track your documents, should this become necessary.

Reference: IRS