It’s everyone’s favorite time of the year; tax season. This can be a difficult time of year if you are someone that is self-employed. Taxes can be a complicated mess, but if you have some tools and the right people to work with, you can turn this dreaded time of year into one that isn’t quite as painful. Mark Dicus & Company is here to share some tips to help you lower your taxes if you are self-employed.
Increase Your Business Expenses
While this may sound like it goes against everything in making money, increasing your business expenses is one of the top ways to save money at tax season. The good news is, you are probably spending the money you need to already and just not realizing that you can write those things off. Some business expenses that you can write off include: equipment, education, travel, labor costs and more.
Change Your Business Structure
If you don’t have your business set up as an S corporation, you may be missing out at tax season. This is one of the best business structures out there. When set up this way, you will be paying yourself with a reasonable amount out of your earnings and the rest can be distributed to yourself, any shareholders or left in the business. This can help you out as the money you pay yourself is taxed, but the rest of the additional income usually does not fall under a taxable income.
Tax Write Offs for Self Employed
When you are self-employed, there are several deductions that can help you lower your taxes. Some of these deductions could include:
– Interest paid on any loans taken out for your business
– Mileage that you used to travel and meet with clients or for other business purposes.
– Deduct costs that pay for your health insurance that you have paid for out of your own pocket.
– Home offices can be deducted from your taxes when you work from home.
– Improvements made to improve the building or property of your business.
Take Advantage of Tax Credits
Some people make the mistake of lumping tax deductions and tax credits together, but they are different and you should be taking advantage of both of them where you can. Tax credits work to reduce your actual tax dollar for dollar. If you get a tax credit of $1000, you simply owe $1000 less. Not all tax credits are going to be associated with your business, but it is worth looking into to see what you can save and where.
Business Tax Planning, Preparation, Filing & More in & Everett, Bellevue, Kirkland, Renton, Kent, Tacoma & Seattle, Washington
If you are self-employed and are dreading the headache that comes with tax season, you can turn to Mark Dicus & Company for help. We can work with you to help save you as much money as possible at tax season and help you find deductions and business expenses that you may not have thought of to make a big difference in what you owe or get as a return. Call us today!