The Must Know Tips to Tax Deductions if You are Self-Employed
When you are self-employed, the biggest concern any person would have is the Tax Payment.
Ever thought about the tax deductions?
Well, this is something you could never think off of.
If you are a W-2 employee, filling tax can surely be a task of great hustle. But, when you are working for yourself, the intricacies of paperwork and getting done with the tax formalities can be nail-biting. No matter if it is your first time or 21st, some ways can save you a bunch of dollars every year.
If you are a common self-employed man and looking forward to saving through your tax filing this year, you must go through this detailed guide that would surely help you with all the mind-boggling paperwork, help you file your taxes with 100% accuracy and majorly, tax deductions.
Is it your first time?
Well, there is always the first time, but for you, we are here to guide you through. If you are filing tax for the first time, the best advice would be to hop on to the TurboTax technical support number and know all about it. Here is some extra piece of advice for such labyrinth of tax formalities.
Before everything let us just understand what are tax deductions and how do they work. It is an amount of money that the Internal Revenue Service offers you to deduct from your AGI (Annual Gross Income). This further reduces your taxable income.
But, most of the times when you are availing reductions on tax quite frequently, you are considered under the low-income bracket. This furthers diminishes your annual tax calculations.
To talk more about the deductions in the US tax law, they are classified into two types: the Standard deductions and the Itemized deductions.
The standard deductions are preferred the most because they are easy to understand and it is also the flat amount on your tax bills that the IRS offers. Though, the amount of deduction depends upon the tax filing on every individual separately.
On the other hand, the itemized deductions are the ones that allow you to deduct some amount of tax on particular items and not the tax as a whole. Coming back to the self-employed individuals, the business-use fragments of the expenses can only be deducted.
This could be a lot confusing. But, there is always a way out. When you are stuck at such issues, you can reach at the TurboTax customer support number and your tax-related queries are sorted right away.
Why it has to be so intricate?
The increasing tax-preparation burden is one of the major burdens on any self-employed lifestyle. It is quite a task for the self-employed professionals for filing tax because of it not the case like a full-time employee who can easily file their taxes with the W-2.
Some freelancers file tax quarterly and having heavy penalties and IRS risks. Also, they are paying for the medicals and the social security taxes that the organization covers up on the behalf of their employees.
When self-employed employed individuals pay the same, they are self-employment taxes. This is the major reason why a self-employed run after deductions because he is already tired of carrying the hefty load of other taxes.
When the setting-up costs are heavy, self-employed professionals are depended on the tax deductions due to reducing their sky-rocketed high amount of taxes. Getting deductions on your taxes to reduce the amount from your gross income by itself.
Tax filing for the freelancers can get much into the intricacies while on the other hand, self-employed professionals can choose to write-off the expenses that fall under the below three categories:
- Everything used in business operations.
- Things used when the business is active.
- Everything used for space where your business is operating from.
TurboTax technical support can help you with this. When there are struggles concerning filing tax, it takes some experts to deal with it. So, why wait when professionals can do that for you in no time. It doesn’t take many efforts, all you have to do is to reach TurboTax tech support number.
What are the most-known deductions for a self-employed?
If you are self-employed, this below-mentioned list will surely come in handy. So, let’s waste no more time and get straight to some of the most common deductions for self-employed individuals.
- Travel and Hotel deductions
- Home Office
- Professional Development
- Advertising and Marketing
- Mileage and gas
- Self-employment health insurance deduction
It is quite a deduction, isn’t it?
It might be the case that some of these deductions may not apply to your business but many come in Part II of Schedule C (Form 1040). Also, if the total of your claims come out to be lesser than $5000, there are chances that you might be able to use the Schedule C-EZ.
If this seems to be complicated, you should always trust the experts. TurboTax tech support is quite easily available for such references.
Do not forget the paperwork
All these deductions are transferred to the paperwork in no time. Being a freelancer or self-employed individual can be exhausting sometimes, especially when it comes to filing taxes. But, by gathering the deep understanding of all the possible deductions and the paperwork, you can get the maximum deduction.
This might be nail-biting in the beginning but when you start tracking your business and managing all the necessary deductions that are meant to be for your business forever, you can save well at the end of the financial year.
The best possible way to save your time is to start using QuickBooks Self-Employed and TurboTax. For support, you can always rely on experts by reaching the available contact numbers, TurboTax tech support number.