Self-employment from home comes with a lot of really great benefits – you don't have to leave your warm house in the morning to commute an hour to work; you don't even have to get dressed to check in for a lot of jobs. The downside to self-employment from home is the tax issues that you can run into. Here, you'll find a few things you should know when it comes to your taxes and self-employment from your home.
Use Tax and Accounting Services
First of all, if you've never gone to school or received any training regarding taxes and accounting, the biggest mistake you can make right now is trying to wrap your head around all of it now. There are so many extra elements that go into preparing a tax form for self-employment, and if you don't do it correctly, it could haunt you up to seven years later.
Keep Careful Records
Your next mistake would be not keeping careful records of the expenses and income for your business. If you only watch what you're earning, you're missing out on a lot of tax deductions. For example, if you're selling goods online, you go out and buy the goods for a certain amount and sell them for more. Then, the website that you sell through charges you a fee, and you have to pay for shipping on top of it. All of these expenses are to be subtracted off the profit to show you exactly what you've made on the item – your losses are written off, and your profits are taxed.
Don't Get Behind
Make your tax payments quarterly. You can set things up with your accountant to have the payments automatically made on your behalf. Not only will the taxes being filed quarterly help you track your business's progress, but it will help you avoid getting hit hard with a hefty tax bill at the beginning of the year. It's easier to pay smaller amounts than it is one large bulk payment – and if you overpay, you can get a refund to roll back into your business or apply to the next quarter's taxes.
Working with a trained tax and accounting professional will help you find write-offs that you would have otherwise missed out on. You could be throwing money away by preparing your own taxes and not giving a professional the chance to find the money that should be given back to you by the government. It's your money – get it back this tax season.
Learn more about tax and accounting services from a local accounting firm.