How to Make Self Employment Taxes Less Taxing

Are you one of the many people who decided to leave the time clock or 9-to-5 world behind and start your own business? If you’ve so, congratulations! Whether you have a brick-and-mortar store, operate on online business, serve as a contractor or consultant, or any other of the many possibilities, you’ve made a bold grab for freedom and independence.

Of course, being a business owner has advantages and disadvantages. One of the tougher points may be navigating your tax obligations. Are you clear on how to file a business tax return? How to optimize the tax deductions you qualify for? Are you confused about where to start with self-employment taxes?

CPA Services of Florida can help you plan ahead – or catch up! – so you get the deductions you are eligible for. And make sure you are never blindsided by a tax bill again!

Filing Self-Employment Taxes

When you have an employer, you can count on them to withhold taxes from your paycheck, report your earnings to the IRS and send you a W-2 at tax time. When you are the employer, you’re responsible for doing your own self-employment tax reporting and business tax filing.

Did you know that the self-employed often pay higher taxes than people who are traditionally employed? If you are newly self-employed, or if you’ve been at it for ages but need some help, a professional accounting firm like CPA Services of FL can help.

Tips for Filing Self-Employment Taxes

Here are a few things you can do to make sure you are on the right path:

Set up a business bank account. Keep your personal and business activities separate. The best way to do that is with a business bank account that is separate from your personal account. This will make it easier to track your income and expenses and make preparing to file your self-employment taxes easier and less costly.

Have a business credit card account. In most cases, you need a separate credit card in the name of your business. This gives you an easy way to pay and track your business expenses. It also makes record-keeping, reporting and tax filing much easier.

Make quarterly tax payments to avoid underpayment penalties. As a business owner, you don’t have an employer withholding taxes from your paycheck. But you are still responsible for paying your taxes on a timely basis. Failing to do so could cause you to owe penalties and interest when you file your self employment taxes. Avoid those issue by making quarterly payments to the IRS.

Keep good records by tracking your expenses throughout the year. Don’t wait until taxes are due to add up your expenses! You could easily miss deductions that would have reduced your tax bill. We will help you set up a system for tracking expenses as they are incurred, so you don’t underreport business expenses and maximize your tax savings.

Plan for your own retirement with a self employed retirement plan. As a self-employed person, you have access to some exceptionally generous retirement plans, including solo 401(k) plans and SEP-IRAs. These accounts can reduce the amount of taxes you pay, so let us help you do your homework and choose the one that is right for you.

Have your taxes prepared by a qualified tax professional. When your personal taxes are simple, doing them yourself is manageable. But doing business taxes yourself, even with online tax software, may cause you to pay more than you should. Even if you are confident in filing your own self employment taxes, it’s a good idea to have your work reviewed by a CPA. Contact us at CPA Services of Florida for tax preparation or review.

Don’t let self-employment taxes be over taxing. Plan carefully with CPA Services of Florida to help your accounting and tax reporting go smoothly. And, keep more of your profit in your pocket by getting the right deductions and tax breaks for your business!

CPA Services of Florida

CPA Services of Florida offers proactive accounting services to steer you through bookkeeping, tax planning and preparation, financial statements audits and more. We have more than 30 years of experience in accounting and small business consulting, and we are here to help with your business and personal accounting needs. Call us for tax help today at 941-924-1120.