Self Employed Tax Return
Doing taxes may seem like an annoying thing to do as an adult but it's essential to do a self employed tax return. Not only will you have to decide how much to put away for taxes but it can save you from being audited from the IRS. However, do keep in mind that they may or may not apply to everyone.
- Know how much your state charges on taxes. Whenever you do go shopping, look at the receipt of how much they charge on sales taxes or any kind of taxes. That should give you an idea of how much to save up. It is important to know this since you are having your self employed tax return done.
- Put aside a portion of money you get from your clients. In most business advice, they suggest you save at least 30% of your net earnings for self employed tax returns.
- Save all your receipts and bank statements. One of the biggest mistakes that business owners do is to not save all of the receipts for business purposes and bank statements for proof. If you do not save your bank statements that you get in the mail, you can go to your bank account online and print it from there for your self employed tax return.
- Report your net income on Schedule SE if you net at least $400 or more a year. It doesn't matter who does the taxes. This form is necessary to use on reporting your income for the year. If you are planning to do your own taxes, have a librarian take you in the right direction of how to do it on your own for your self employed tax return.
- Decide on doing your own taxes or hire an accountant. If you are good with accounting and want to save some money, it is best to do your own which is good for self employed tax returns. However, if you do have some extra money to hire someone to do it for you, go hire an accountant and/or bookkeeper. Bookkeepers tend to be cheaper than accountants. Most business people seem to go this route since they want to delegate this task to someone else while making more money.
- Either wait to get your money or pay for taxes. Depending on whether you owe taxes or not, it is a good idea to have some money of what you saved up to back you up. You do not want to get audited by the IRS for your self employed tax return.