Business analysts say that more and more people are starting home-based businesses and going into self-employment. The news is not surprising because being self-employed and owning your own business has many benefits. Personal success gives you a sense of accomplishment in addition to the fact that you can call something your own. On the practical side, you're your own boss, which means you set your own hours and decide how much you want to make.
Business analysts say that more and more people are starting home-based businesses and going into self-employment. The news is not surprising because being self-employed and owning your own business has many benefits. Personal success gives you a sense of accomplishment in addition to the fact that you can call something your own. On the practical side, you are your own boss, which means you decide how many hours you work and how hard you work on a project. Also, dealing with self-employed tax, sole proprietor tax, business tax, and other financial matters has its own benefits.
Jan Zobel, a freelance tax expert, says that it is easy to handle your taxes. She has managed taxes for more than 20 years, so she has some tips on how to handle taxes for self-employed people, sole proprietors, businesses, and other independent people. She suggests putting things like taxes and bank records with appointment books, daily planners, or calendars. Zobel tells you that you can make money by being on time. Your schedule can be used to prove and explain business expenses like mileage, phone bills, and hotel receipts. All of a sudden, you can get a tax break. She tells you to write down how long your business trips take and how many miles you drive in your appointment book. Zobel also says to pay attention to the money side of things. Most of the time, these are what cause tax problems. Record all of the money that goes into your bank account, whether it's a loan, a gift, or money for your business. It also helps if you write down where the deposits came from. Put these notes in a chequebook or a separate file. So, you can separate your business income from things like loans and gifts that aren't taxed. Even if the extra money came from gifts, the IRS usually assumes it was income that wasn't reported. The IRS won't have tax problems if there are proofs or records of these gifts. Zobel says that you can't expect to remember everything about your finances when it's time to do your taxes.
Separating business accounts from personal accounts helps a lot with taxes for self-employed people, sole proprietors, businesses, and independent people. Zobel says that you should keep your business money in a separate account from your own money. Don't forget to write business checks from the assigned account and business checks from the assigned account. Zobel says that people who don't want separate accounts should write "business" or "personal" on the back of each check they write. Putting something like "for office furniture" on the check won't hurt either. This tip makes it less likely that your personal and business money will get mixed up. Following this tip, it's also best to keep credit cards for personal and business use separate. She also says that the interest on credit cards used for business is 100% tax-deductible. Zobel says that credit card and sales receipts should be kept. When there are audits, these are especially useful as references. Tax experts, professional tax managers, and the Internet are also good places to look for tips on how to handle taxes.
Lastly, keep your records clean and straight whether you pay self-employed tax, sole proprietor tax, business tax, or freelance tax. Also, don't forget to pay your taxes on time. When you're in a hurry to meet a deadline, you might forget important documents, which could cause tax problems.
