Making The Most Of Your Money

Making The Most Of Your Money

Staying Organized For Taxes When You Are Self-Employed

by Glen Robinson

Being self-employed means that you have to keep track of your spending and income in ways that people who have other employment don't. Here are tips to help you stay organized when you are self-employed so all your taxes are accounted for when the season rolls around.

Track all travel receipts 

If you travel for business, make sure you track all your receipts. You can get reimbursed for your gas mileage, meals, and other related expenses when you go to write off your taxes. The accountant you use can provide you with a booklet you can use to log gas mileage or cost of gas on the days that you travel for business so you can account for all your spending in this manner.

Save a portion of your earnings

As a self-employed individual, you don't have taxes taken out of your paycheck for things like Social Security. This is paid when you file your taxes quarterly or once a year. Set aside a portion of your earnings based on your tax bracket so you have the appropriate funds to pay for taxes when they come due. You can use a tax calculator for both federal and state taxes to help you calculate just what percentage of your earnings you should set aside to pay with when you file.

Know your home office use 

Portions of your bills you have at home can be written off on your taxes if you use certain utilities for your work or you have a home office. A home office is typically deducted by the square footage it takes up in your house versus what you pay for your mortgage or rent. The rest of your utilities, such as electricity, phone, Internet, and other necessities, are typically deducted your tax accountant by the percentage you use for working and not home use. It's a great idea to take your utility bills and mortgage with you when you file taxes so you can accurately calculate what can be written off.

If you buy a computer, laptop, printer, or other office equipment during the year, you can save those receipts as well. These items can be deducted from your earnings to help reduce the amount of self-employment tax you pay when you file.

You need to keep track of your finances, home office, and travel use when you are self-employed. This way you can write off the right amount of deductions whether you file quarterly or once a year. Talk to an accountant, like Balkcom Pearsall & Parrish CPA's PA, for more help.


About Me

Making The Most Of Your Money

When it comes down to it, most of us could manage our money a little bit better. I found myself in this boat a few years ago, when I realized that I was almost broke because of my poor spending habits. I was tired of being constantly out of money, and it felt like I was drowning in debt. I knew that I wanted something to change, so I started focusing on making the most out of my money. I spent a lot of time completely overhauling my budget, and it really made a great difference in my personal life. I realized that I had a lot more money, and that I wasn't as stressed about finances all of the time. Check out my blog!