Tax laws are forever changing. There are ways to tackle your taxes successfully, however, if you have the right information at your disposal.
To help your cause, here are some tips offered by Meredith Little, an independent contractor who has addressed the issue of taxes and the self-employed for TechRepublic. The information provided by these four articles can help you be one step ahead of the game and ready to file your taxes for the second business quarter on July 31.
Self-employment income is taxed at a higher rate than employment income. You could save more than 40 cents to the dollar by doing some extra homework according to “Take advantage of the new rule on the home office deduction.” This article explains the new 1999 tax code, which allows you to deduct expenses generated by your business.
How do you know if travel and commuting counts as a deductible? “Deducting your automobile and other travel expenses” differentiates commuting from travel expenses and explains how to calculate them.
“Deducting self-employment business assets: Depreciate, or use Section 179” illustrates why utilizing Section 179—which deducts the entire cost of an item for the tax year in which you purchased it—is more beneficial to the independent businessman than simple depreciation.
By establishing an IRA, you can save yourself a bundle in tax deductions. The SEP-IRA, Keogh Plans, and SIMPLE IRA all lend themselves to independent consultants, according to “It isn’t too late to set up your self-employment IRA.”
Is there a tax law that you find particularly unfair? Share with us your views on the taxes imposed on the self-employed. Post a comment below or send us a note.