Sole Trader Tax Return -Getting Prepared For Tax Time
Sole trader tax return tips are given below in this article. Now that you have started your own business, for example blogging and earning some money from your efforts, now is the time for you to begin considering tax time.
Many sole traders, such as designers, consultanters, trainers, marketers and bloggers, get into the business without planning ahead for tax time and they will ultimately have to pay taxes on their earnings. If you fail to report the money you’ve earned from your sole trader business, you could potentially end up in lots of trouble with thetax authorities. Consequently, if you haven’t already, you should begin taking these steps to be able to prepare yourself for tax time.
Not to worry though, we will provide you with some key tips to use for your sole trader tax return:
Keep Track of Your Earnings
The first thing you need to do to prepare for tax time is to keep accurate track of your earnings. If you have affiliate links on your blog that are earning you some money, by way of instance, you need to keep an eye on the money you earn each month from these links. If you’re selling a product like an ebook, you need to keep track of these sales as well.
Fortunately, many affiliate programs will provide you with monthly statements and yearly statements that summarize your earnings. Also, if your customers use a company like PayPal to purchase products from your site, you can make it easier to keep track of your sales by setting up different PayPal accounts for each product or blog you own. Not оnlу саn thіs hеlр уоu kеер bеttеr trасk оf your income; it will also make it easier for you to track the success of a particular product or blog.
As a company owner, there are also numerous deductibles, including online running costs, which you may be able to benefit from. Be certain to keep tabs on all of your business expenses to be able to keep your total tax burden down. You may be surprised by all of the items you might be able to deduct from your taxes, such as:
A portion of your utilities if you do your work from home
Expenses associated with travel associated with your sole trader business (i.e. for business meeting or for attending conventions)
The cost of buying equipment associated with your blog, such as your computer, your printer, and printer paper
Of course, it’s better to consult with an accountant to be clear on what can and can’t be taken out of your business expenses. This way, you can be certain you’re filing an accurate sole trader tax return, which you can stand behind if you happen to be audited. And, remember, if you’re filing your taxes as a sole trader, you and your company aren’t thought of as separate entities.
Thus, your business tax burden is your tax burden. In addition, your income will be taxed on the higher earner tax rate if you make a good income, so you need to take advantage of every deduction potential! Or consider opening up your own limited company.
Faithful in your success!
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