Self-employment taxes are likely to be more complicated for business owners. Looking at the brighter side of things, taking the risk of launching a business can make a person well on his way to achieving bigger goals. So let’s look at a few things to ease up some of the troubles for self-employment income tax and filing.
Self-Employment Taxes | Useful Tips for Self-Employed Taxpayers
1. Consider Home Office Deduction
Creating a home office can be a huge advantage for tax filing purposes. A business owner can deduct some non-deductible expenses such as a portion of home insurance and utilities for self-employment tax deductions. Having a qualified home office also takes advantage of the rent as a non-deductible expense during tax payments.
2. Business Mileage Tracking
Carefully documenting mileage is a vital thing to remember when driving for business purposes. This includes the purpose of the trip, parking costs, and the date. Small trips can add up over the course of the year. Thus, good record keeping is very helpful for tax-deductible expenses list.
3. Section 179 Deduction
Eligible businesses can claim first-year depreciation tax deduction for the whole expense of new or used personal property in service by December 31st, 2014. The deduction limit as of recently is $25,000. This implies businesses can take the entire cost of qualifying assets from their 2014 taxes up to the deduction limit.
4. Educational Expenses as Tax Deductible
Attending courses and purchasing books for business improvement can qualify as tax deductibles. Make sure to save all receipts, for subscriptions to publications to help grow a business may qualify. A business owner certainly benefits in tax purposes while learning.
5. Health Insurance Premiums
Business owners paying for their own health insurance premiums who are not eligible to participate in their spouse’s employer are allowed to deduct their health-related premiums. This includes health insurance, dental, and long-term care. They can also deduct premiums paid for their spouse and dependents.
Watch this video by mahalodotcom on a brief explanation of self-employment taxes:
Self-employed and business owners tax filing can be a troublesome process. On the other hand, doing some research is definitely beneficial in reducing taxes. People take risks and reap the fruits of their labor in the long run. Besides, seeking assistance from qualified professionals is always an option to take advantage.
Do you have more tips and things to watch for self-employment taxes? Share your thoughts in the comments below!