Owning your own business or being a freelance worker can be one of the most independent jobs ever. When you build your own business from the ground up, that means that you get to go to work every day and do what you love to do. You get to build your business up and create as much income up as you want to make. It gives you a bit more freedom, but still requires a lot of work.. Having your own business that decides who and when you work for comes with a lot of advantages; unfortunately, one of those advantages is not getting out of paying your taxes every year. You still have to do your own taxes, and they are even more complicated when you are a freelancer or a business owner because it is no longer written out for you line by line as it is for employees.
It can be difficult learning how do your own taxes when you have your own business so it may be wise to look to a professional and use their services when ax season comes around so that you can be sure your taxes are done correctly. A professional can answers questions you may have about many aspects of financial matters. You might have a question such as, “What is a living trust?” A professional will be able to answer that question for you.
Below are a few reasons that it is vital for you as a business owner or freelancer to use a professional tax preparer for your taxes during tax season.
1.) Ensure you are withholding enough money out of your income
When you are someone’s employee, you do not have to worry about withholding a percentage of your checks to put towards income tax as your employer does that for you. They also handle all of your necessary deductions as well. When you become a business owner, you will need a tax professional to teach you how much to withhold from all of your income so that you will give the IRS everything that they are owed. The consequences for not putting aside enough money to give the IRS can be pretty substantial, so having a professional guide you through that process keeps you and your income as safe as possible.
2.) Tax professionals will help you get the medical deductions you are owed
Setting aside funds to give the IRS for your taxes can be a difficult thing to learn how to do, but the IRS is not all bad, they actually have things like medical deductions that are put in place to help business owners out. A tax professional can help you find all of the deductions that you are owed which will help cushion your tax liability. Without a tax professional, many business owners would never know that they are able to deduct all of their health care premiums which could save them a lot of money!
3.) The IRS shouldn’t keep your home and business deductions
Though you can set up your own income and make a lot of money operating your own business, having your own business that you run out of your home can also add up a lot of expenses. It is going to result in things like higher energy and phone bills, better computer equipment, office needs, possibly rent if you are working out of a location other than your own home, and maybe expenses due to travel. All of these expenses add up quickly and can make it hard to save money and set it aside to pay for your taxable income. A tax preparer can help you find as many deductions as possible. Many of these expenses can be counted as business expenses which means less money that you owe the IRS when tax season comes around. The best thing you can do to save yourself some money is to save all of your receipts for things like office supplies, travel, gas, even office furniture to give to your tax preparer so they can help calculate deductions. It is also wise to have records that are detailed as possible and record why these expenses are business expenses so that your tax preparer can find you as many tax savings as possible.
You work hard for the money that you make, and it is important to consult with a tax professional early and as often as possible so that you stay on track and save as much of that hard earned money as you can.