The word taxes can make anyone draw back in fear, and when you’re self-employed, it can be a minefield to navigate. Understanding tax is an important first step, and once you’re aware of how tax is sorted, you’ll find it easier to do. Here are a few tips for handling taxes when you’re self-employed.
Take Note Of Your Expenses
Your expenses are things you’re going to claim against your taxes. Being self-employed means you don’t get the same perks as someone who works part-time or full-time. You won’t get sick pay or holiday pay and therefore, expenses are where you should really take advantage of cutting down what you owe to make sure you’re getting the most money from what you earn. Keep hold of all your receipts and make sure they’re for the things you use to help run your business.
This might be purchases you’ve made to buy equipment, software and you might also want to contribute part of your utility bills as you may be working from your home and that in itself is a business expense if it’s deemed your place of work.
Track All Your Income
A good way of understanding your money properly is to track each and every amount you make through self-employment. Make a note of everything, no matter how great or small it is, and label it with the date you received payment. Explain what it was for and make sure to hang onto all of your invoices so that you have them as evidence should you need them. When it comes to doing your taxes, you’ll have the exact amounts you made during the year, and that will help a lot when it comes to figuring out how much tax will be required from you personally.
Do Your Taxes Early
It’s hard to do your taxes early, but you’ll definitely find it beneficial to get it done early, so it’s out of the way. If you ever run into any problems with taxes, you can always get in touch with Law Office of Stanton D. Goldberg, who can help. Try to get your taxes done and out of the way so you can just focus on what’s important, and that’s your work. If you need any assistance, then there’s always accountants you can hire to help you with doing them properly.
Set Aside The Tax From Each Payment
As a way of getting ahead with your tax payments and to ensure you’ve got enough money in your account, set aside some money. Better yet, set aside the tax you’d be expected to get taken off for each and every payment. That way, you’ll have more than enough and anything left over, you can put back into your profits.
Handling your taxes can seem daunting when you’re in your first year of self-employment, but it’s important not to panic. Follow these steps and always ask for help if you’re struggling. There’s plenty of people out there that are doing it, so you’re not alone.