Know your stuff - Tax Deductions For the Self Employed

by:HONGXIANG     2020-06-16
Today's job market is recovering from the downturn of 2008 and 2009, but many people are hedging their bets with future by either starting sideline businesses or striking out on individual positions. It may seem a daunting prospect, but there are several tax deductions available to encourage entrepreneurs. In December of 2010, the government passed a short-term tax relief act which, among other things, lowers the taxes paid for self-employment by 2%, reducing it to 13.3% (12.4% for you to social security, and 9.9% to Medicare) until the end of 2012. While the reduction may not continue past that point, now is often a good time to benefit of self-employment opportunities. In addition, it's important to see that fully half of self-employment taxes affect precisely the net income (income after deductions). Some other important tax deductions make use of when working for your own behalf are: Internet Access- Home or (rarely these days) internet cafe internet fees could be deducted. Note this specific doesn't include drinks paid to work with a coffee merchant. Also, if the access charge is a monthly home bill, calculate only the involving time spent for business. Phone Charges- Again, for a cell or single-line phone, only deduct depending business use. If a separate business lines are used, that line may be completely deducted. Home Office- Possibly the biggest-and complicated- deduction available is for that maintenance and utilization of a personal office space. A portion of rent or property tax may be assessed for space will be used 'exclusively for business'. It may well be worth initially consulting a certified personal accountant during this deduction, it may also include utilities, office furniture, depreciation belonging to the furniture, and maintenance costs. Office Supplies- General office supplies used in business, and all postage for promotion or work submission (such as for writers or transcriptionists) are allowed. This deduction covers printing and copying fees, and ink refills for home publishing/printing. Travel- A boon for contractors and repair businesses, travel costs to and from temporary work locations (or from site to site) can be written off. All business travel for those working your own is tax deductible. General Business Fees- Licensing and regulatory fees to state or local government, and dues to unions or professional organizations may be permitted. To acquire a more complete list of applicable self-employment deductions, make contact with a CPA or tax professional, or consult the business and self-employed section among the IRS net site.
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