2017 Tax Season may be over, but that doesn’t mean you can forget about your taxes all together! Now is the best time to start preparing for this time next year. Save yourself a little headache and prepare as you go throughout the year, rather than try to scramble around for all of your tax information right before they’re due in 2019 (yes, I’m looking at you.. person who just filed yesterday). I’m sharing a few self employed tax tips, like what you can write off and how to stay organized, to help you enter tax season with a head start.
Taxes are intimidating as heck, especially for small business owners and the self employed. This year was my first year filing as a self proprietor, and even though I felt prepared going into my meeting with an accountant, in reality I was only skimming the service. Here are a few of the tips that I’m taking seriously this year… I want to share with you because #lifehacks aren’t meant to be kept to myself!
11 Self Employed Tax Tips
- Keep Receipts- I can’t emphasize this enough. Save every receipt throughout the year and be organized. If you ever get audited, you’ll want it to be as pain free as possible to gather the info. depreciated over several years. Personally, I take a photo and also keep the hard copies in a organized, expandable envelope.
- Work Vehicle- Log your mileage (I use an excel document to track trips, but there are apps out there, too!). Save receipts for parking. Save receipts for tolls. Noticing a trend yet? SAVE RECEIPTS.
- Continued Education- If you’re taking any classes or courses to continue your education, those are write offs. Online or in person workshops, books, etc. Sign up and (you guessed it) keep your receipt. Also the traditional tuition and student loans… but you can click there to learn more.
- Promotion and Advertising- These are costs associated with anything and everything to promote your business. Traditional ads like radio and tv, banner ads, Google Search, social media, purchasing a product for a giveaway to grow your followers, getting headshots taken, ordering business cards, etc.
- Banking/Payment Service Fees- This one is very easily overlooked… Fees associated with PayPal and traditional banking can be deducted, so be sure to keep track of them.
- Business Tools + Office Supplies- All of those tools such as Dropbox, Photoshop, etc, that make your life easier. Computer, camera, printer, pens, water bottles, snacks, calendars. The more expensive items, like a computer, will need to be depreciated over several years. But, everything including the office snacks and cleaning supplies, are deductibles.
- Accounting + Tax Preparation Services- If you are a small business owner or self employed, stop what you’re doing right now and hire a tax professional. You’ll be able to deduct the fees associated with hiring them and more times than not, the professional will help you save even more money than you thought was possible. But, I repeat this over and over, YOU STILL NEED YOUR RECEIPTS. Just because you hire someone doesn’t mean you shouldn’t be keeping books throughout the year and holding on to your receipts.
- Contract Help – Hiring someone to help you with marketing? An assistant to keep you on track? These are all write offs. They are people you are contracting to help with your business and what you pay them is tax deductible. If you’re the one being contracted, it’s important to remember you don’t have to claim the wages if they are under $600.
- Savings – When you are self employed, you can put money into an account to save for later in life- such as a SEP IRA. One plus side to this, that money doesn’t get taxed. One down side, you don’t get to pocket that money at this point in your life. There are legal specifications that vary by case, so I recommend you talk with a tax pro to make sure you stay on track.
- Travel Fees – If you are traveling to meet with a client, that’s a write off. Your meals, an Uber to the airport, a hotel stay, parking fees, etc, are all write offs under travel.
- Health Insurance – If you are self employed, you most likely pay your own health insurance premiums. Luckily I haven’t had to do this year.. but it’s important to remember that the premiums are tax deductible.