Being self-employed can be a great experience. You are going to have the chance to get rid of your boss and work your own hours. But this kind of employment can also be a scary thing to deal with as well. Finding all the clients and learning the right process to take in order to get through without too much trouble when taxes come along is a challenge that you are going to have to learn how to handle as the years go by. While it may take some time, there are some simple things that you can do right from the beginning that ensure you are getting the best results with your own business.
Hiring a tax professional right from the start can make a difference in how well your business runs in the first couple of years. There are a lot of records to keep in place and as your own business owner, you can even qualify for a few more deductions than you did in the past. Learning how all of these work can make a big difference in your tax bill and how much you earn from year to year. Make sure to contact your tax professional to learn the best way to file your taxes and the importance of keeping your records in line even as a self-employed individual.
Keep Track of Income
The first thing that you need to keep track of when you are self-employed is how much you are bringing in. This number should be kept separate from your expenses so that you are able to see the full number. Make sure that you figure out the income that you are making from all sources. If you work several different businesses from home, you should include all of them together. If you work one business but have rental properties or some other residual income on the side, count this in as well.
This part may be a bit easier compared to doing the expenses, but it is still important and you should do it each month. This gives you a good idea of how much money you have to work with each month. You can then compare it to your expenses and determine if you are spending too much or if you are going to have enough to make that new purchase that you have been looking for to make your business grow.
If you need help with your income amounts and want to figure out how much you are really bringing in compared to your actual expenses, make sure to talk to a tax professional to help you out today.
Keep Track of Expenses
One of the most important things that you can do for your business is to keep track of all the expenses that you have during the year. These should just be the expenses for your business, not anything else, but when you keep good records of this information, you will find it is easier than ever to get more deductions and to save more money during tax time.
So keep as good of records as you can throughout the year of all the expenses that you have. If you purchase any equipment for your business, such as a computer for your writing business or some office supplies that help you to get started, you should keep track of these as they are all deductible. In order to count these as deductions, the supplies need to be ordinary and necessary for your business. This means that they need to help your business to run and that others in the same kind of business would be likely to use these same supplies to run their businesses.
If you are able to prove both of the things at the end of the year, it is likely that you will be able get these supplies deducted. You do need to be careful to keep good records though. Bank statements and receipts that prove that you purchased these supplies and used them for your business. Keep these around when you are ready to start working on taxes and see how much they are able to help with your tax bill.
Hiring Professional Help
Sometimes there just isn’t enough time in the day to get everything done. When you work for yourself, you are often working past the regular 9 to 5 and finding time to keep track of your records, much less getting taxes done at the end of the year, may seem like a huge challenge. Rather than letting your records fall to the wayside and worrying that you are not going to have enough to make it through from year to year, consider hiring a tax professional in your area. These professionals can take over all your bookkeeping needs and walk you through the process of doing your self-employed tax return so you can lower your tax bill and get everything done on time.
Hiring a tax professional is one of the best things that you can do for your self-employment business. Whether this is your first year in business or you have grown larger over the years, this professional help is going to make a big difference in how stressed out you are at the end of the tax year. Contact our offices today to get started on all your record keeping and tax needs as soon as possible.
Johnson, Johnson & Associates, Inc.