Here are ten tax suggestions that ought to help you get through Apr 15 a little easier:
Health insurance coverage premiums are tax deductible. Read the rules here.
Do your 1099 taxes quarterly. Doing something a bit at a time makes it less debilitating. You usually have to make estimated quarterly tax obligations if you expect to owe taxation of $1,000 or more whenever you file your return.
Do the math: if you make $5k/quarter, pay estimated quarterly taxes.
Mileage: it’s your BIGGEST deduction.
To get the maximum deductions for a company vehicle, you must maintain a written log of business miles. Make it a habit. Fifty five cents per mile add up quick and big.
Save for tax: Set 25% aside from every payment you receive. Put it in a savings account so you cannot touch it. Know exactly what you can and can’t deduct.
Your employer pays the other half if you are employed. But you are not W-2, are you? So guess who your employer is? YOU! You pay ALL of a FICA and Medicare tax.
Your taxable 1099 income is this same thing as a net profit, which is a 1099 income minus a deductible expenses.
The home office deduction: Create a dedicated space to work from your home. Measure it in sq feet. Figure out this percentage of that space in relation to a whole house. You can deduct that percent of all your home expenses: utilities, mortgage interest, cleaning, repairs & improvements, water, etc.
Retire: Okay, do not retire yet, but think about it and put money towards it. What we mean is. the best taxation write off for the self employed is a pension plan (see the link above).
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