3 Tips for Managing Your Own Taxes When Self-Employed

Being one’s own boss is the ultimate dream for many. It’s no wonder that many people are choosing to start their own management and contracting businesses in the current economic climate.

Many are turning to other ways to gain a larger income by applying for and talking to the experts from Contractor Training Center and other similar companies on how to obtain their general contracting license – enabling contractors to earn a higher salary and take on bigger projects.

But while many people are choosing to become more independent and self-sufficient, there are some detractors that might give those interested pauses, such as having to file and manage your own taxes. Luckily, managing your own taxes is becoming increasingly easy: with so much available help and external sources to turn to, it is becoming simpler to manage your finances yourself.

3 Tips to manage your taxes

Here are 3 tips on how to manage your own taxes if and when you decide to become self-employed:

1. Keep Track

Keeping track of all expenses is not the only key, it is absolutely essential when working for yourself. As the sole provider and resource for all work that you perform, you must keep a written record of every single expense you pay money for. Whether it’s tools or equipment, purchased or rented, keep a paper and online record for every single expense you acquire while working.

Many times, people new to self-employment will underestimate the number of supplies and expenses that can be written off on their taxes. Expenses such as gas, car insurance, travel costs, etcetera, can all be claimed back. It’s always better to be safe than sorry – even if you think something will not qualify, keep it documented just in case. This also includes any donations you may make, no matter how nominal.

2. Hire an Accountant

Outsourcing help when tax season rolls around may be a good option if you want to make sure you cover all bases. With an accountant to file your taxes, you won’t have to worry about making mistakes or filing the paperwork incorrectly resulting in a late fee. Accountants are prepared to know the ins and outs of taxes for even the most specific and unexpected situations.

By hiring outside help when it comes to managing your taxes, you may find it is well worth the cost to save on time, stress, and even money itself. However, be sure to make arrangements as far in advance as possible. Accountants can become very backed up around tax season and will be in high demand throughout.

3. Tax Filing Software

Thankfully, tax filing software such as TurboTax is making life that much easier. Software such as this is designed to help self-employers of all kinds to cover ALL bases, including state and city taxes. These software programs are extremely user-friendly and instantaneous, delivering your tax refunds by direct deposit as soon as they are approved.

For workers who are not supplied with W2 forms and the like, TurboTax and other such software will come at an expense. However, in the long run, it is worth it as it prevents errors and calculates all costs and factors into a specific algorithm that might otherwise be tricky to figure out on your own.

In Conclusion

When choosing to become self-employed, there are many facets to consider. Renting office space, potentially hiring employees, and marketing yourself are just a few examples of smaller jobs one must complete in order to become their own boss while maintaining a successful business endeavor.

However, worrying about taxes should not be enough to detract anyone who wishes to become self-employed from embarking on that venture. With so many different sources to recruit from and alternative ways to manage and file your annual paperwork, you can easily melt the stress away and channel both your time and energy into other worthier tasks. Even if you do decide to become your own boss, no man is an island.