As a self-employed independent contractor, the tax clock is ticking and you?re in serious danger of letting money slip through income tax relief your fingers. If you?re not careful, you could also make some common self-employed independent contractor income tax mistakes that will mean you?ll owe back taxes on your 2009 income tax return.
For tax planning as a self -employed freelance professional, the most important thing to do is income and deduction management. As many Americans have discovered in this down economy, starting your own business is a good way to cut back on business expenses because taxes are Considered legitimate tax write-offs. However, you must exercise caution in business expenses on Categorizing avoid owing back taxes and IRS penalties for incurring mis-Categorizing personal expenses as business expenses. This is a tax crime and is severely Punishable. For more ways to legitimately maximize deductions while avoiding IRS tax problems, check out Part 1 of this series on Year-End Tax Tips for Independent Contractors and . Self-Employed Individuals Who Need Income Tax ReliefTo help you save money on your taxes and get the income tax relief you need, here are 10 important tax planning strategies to consider:
Tax Help Tip for Self-Employed Freelance Workers # 1: Sweet Charity is not just a musical When it comes to your charitable giving, to get the maximum income tax relief of course. you should give as much as you can before December 31st, but there might be additional ways to meet your charitable goals while easing your tax burden back. If you donate your services to a charity, you can deduct the market value of that contribution from your taxes. Perhaps you can set up a foundation that would receive funds to meet your charitable goals without showing up on your balance sheet as income. Of course you do not want to be on the hook for tax fraud then a tax attorney can give you tax help you set up the charitable giving plan that provides you and your business maximum income tax relief.
Tax Help Tip for Self-Employed Freelance Workers # 2. buy stuff If your self-employed independent contractor business needs supplies and big ticket items, buy them before year end so you can get the deduction early. Sneaky income tax relief tip ? if you buy a big ticket item on December 31st, instead of January 1st, that one day Allows you to get a full year?s worth of depreciationTax Help Tip for. Self-Employed Freelance Workers # 3: Do not forget to take (tax) credit where credit is due. There are lots of income tax relief in the form of tax credits that you may be eligible for, search as the earned income credit, dependent care and the child tax credit and the first-time homebuyer credit.
Tax Help Tip for Self-Employed Freelance Workers # 4. Home is where the office is relief> To get the maximum income tax, make sure that all qualified business expenses end up on your balance sheet. If you have a home office, make sure that everything that goes into that office is accounted for, including telephone, Internet access, supplies, repairs and maintenance, etc. The home office deduction used to be IRS audit bait, but today more and more self-employed independent contractors have home offices. Just make sure that you are following the IRS?s home office guidelines: http://www.irs.gov/newsroom/article/0,, id = 108,138.00 html.. If you have claimed a home office deduction and you sell your house, you will have to consult with a tax attorney for tax help on how best to handle the depreciation recapture issues unique to your situation.
Tax Help Tip for Self-Employed Freelance Workers # 5. Buy a mileage log book and fill it out If you use your car to go from your home office to the job site, that is a travel expense (which is tax deductible), not commuting costs (which are not tax deductible). Keep a mileage log book in the car. Before the year is out, consult with a tax attorney to get the tax help to clarify Which travel expenses (and car costs) are legitimate for your industry and Which are sure-fire audit bait. Tax Help Tip for Self-Employed Freelance Workers # 6: Separate your work and life: If you have not done so already, open separate accounts, phone lines, etc. Make clear distinctions Sun the IRS can see what are self -employed independent contractor expensesTax Help Tip for Self-Employed Freelance Workers # 7. Have a yearning for some learning to keep you earning: Remember that professional training courses and seminars in your field are tax deductible. Education is an investment but also a nice source of income tax relief. Pay for it today, even if the course is next year and you?ll get the deduction
Tax Help Tip for Self-Employed Freelance Workers # 8. Pay the nanny. As a self-employed independent contractor, you can deduct daycare, nanny care, babysitting and any other type of child care provided while you are working. This creates income tax relief but it also has hidden dangers. If you have hired a nanny to as employee, do not forget to pay his / her Social Security taxes. Forgetting to pay Social Security taxes on child care has gotten a lot of people into IRS tax trouble. . If this is you, get tax help from a tax attorney
Tax Help Tip for Self-Employed Freelance Workers # 9. Pay the wife and kids Your family can produce more income tax relief than just the standard deductions. In addition to paying family members for the legitimate work they do, as employees so you can deduct their medical expenses. Paying family members also helps create a team feeling for your business and teaches children the value of work and life Necessary / office skills
Tax Help Tip for Self-Employed Freelance Workers # 10:. Get tax money for love . Get married and / or have a kid before December 31st for sure-fire year end tax deductions. ? Who says Uncle Sam does not feel the love
While there are Certain tax benefits to being a freelance worker ? seeking as tax write-offs for business expenses, remember that you must tread carefully during these tricky times Sun that you do not find yourself mired in financial turmoil with the IRS. Stay informed and remember that if you do find yourself with tax problems, you are entitled to representation by a tax attorney or tax resolution specialist when dealing with the IRS.
id=?article-resource?> Michael Rozbruch, one of the nation?s leading tax experts, is a Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services . He teams up with an expert staff of tax attorneys, CPAs, and tax relief professionals available to help individuals and small businesses solve their IRS problems with tax liens, unfiled back taxes, offers in compromise, wage levies, tax relief, delinquent returns, tax debt installment plan, bankruptcy and protecting an innocent spouse from unfair tax burdens. Michael also shares valuable tax advice and information in his blog Tax Resolution UniversityArticle Source:
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