So you’ve waded out into the waters of self-employment. You’re staring down uncertainty and taking a chance on yourself.
Congratulations! Self-employment won’t always be easy, but your hard work and perseverance will pay off.
Besides, if it were easy, everyone would do it, right?
In an attempt to lighten your load and ease your burden, whether you are just trying to make the October 15 tax extension deadline, figuring out estimated taxes, or are gearing up for next tax season, take a look at six tax tips for the self-employed and some of the most missed tax deductions.
Work Expenses and Related Fees
It’s time to think inside, outside, and around every corner of the box for this one. What does it cost to run your business? You can deduct office equipment such as printers and computers – even replacement ink and toner.
The paper you’re printing on? Your company letterhead and business cards? Yep, all of those relatively small and possibly overlooked costs can be deducted from your taxable income. Just make sure they are costs dedicated to your business.
In the age of online media, costs and fees are looking different every year. Do you pay for your website hosting and domain name?
Do you pay online banking fees or online payroll software costs? Make sure you don’t skip those expenses when you file your taxes.
Your Home Office Situation
Not only are you able to write off your equipment expenses, but you’re actually able to use the space you use in your house as a home office tax deduction as long as it is dedicated work space for your job at home.
The IRS allows you to deduct part of your home payment (either rent or mortgage) as it relates to the amount of space you use in your home for your office.
Because your office is within the walls of your home, you are also able to write off part of your home insurance and your utility bills. The amount, again, depends on the size of your office.
And even if you choose not to take the home office deduction, you can still deduct your office supply expenses.
Hardware and Software
Did you buy a desktop computer, a laptop, a new monitor, a webcam for face-to-face networking, an iPad, or any other piece of technological equipment to help grow your business and compete with the big dogs?
It’s all deductible. Just be sure your iPad is strictly for business purposes and not a babysitter for your child.
What about computer programs? If you didn’t buy a new computer this past year, but you had to update your current software or purchase new software to get the job done, you can write that spending off.
This is an especially important deduction to remember because, as we all know, software gets expensive . . . quickly.
Everyday Supplies and Office Furniture
Remember back in the day when you worked in a cubicle at some big office? Remember how many pens you lost? How many Post-It pads you went through? How many highlighters and paperclips and staplers you used?
You don’t think about the costs of such items when you’re an employee. But when you’re self-employed, you realize how quickly those everyday items add up.
And don’t forget your home office furniture. Your desk, your chair, your printer stand, and even your trash can are all able to be deducted on your tax return. Just remember to keep your receipts!
Travel and Education
Doctors have journals and teachers have in-service training to help keep them educated and up to date about current strategies and the best new ideas.
For the self-employed, keeping up to date with the latest and greatest trends isn’t always so easy.
For most of us, training and education comes at a price. We have to pay for the conference or the class, we have to pay for travel, we might even have to get a hotel room depending on the length of the conference.
Luckily business travel, education, and training expenses are all deductible. Even taxi costs and parking fees are deductible. Keep good records and get the most out of staying ‘in the know’.
All the Rest
There are so many tax deductions related to being self employed – they just couldn’t all fit into one single article.
TurboTax has made it easy to find the self-employed business deductions you’re eligible for so you can cover all of your bases and keep more money for you and your business.