If you're self-employed, then you're most concerned with spending as little money as possible while generating as much revenue as possible. Did you know that the government actually rewards you for owning a business, in the form of tax deductions?
Here's seven deductions you can claim during tax season:
At least 15 percent of Americans file taxes as self-employed individuals. Many have found that starting business ventures, including those that involve contracting from home, suits their needs while allowing them to generate personal income.
Not only has self-employment saved Americans from unemployment, self-employment has allowed Americans to realize immense tax savings that employees are usually excluded from.
Self-employed people can take advantage of tax-deductible expenses such as supplies, electronic equipment, internet, telecommunications supplies, hardware, and lots of other misc. expenses that are necessary for starting and launching a business.
Those who are self-employed from home can enjoy a tax deduction off the amount of money they pay for rent or mortgage. Of course, they must show proof that they are conducting business from a portion of their home.
Their tax preparer will ask them information about the square footage of their work space compared to the total square footage of their residence. This is because the tax filer will only be able to receive a percentage off the total amount of their residential expense.
Along the same lines, utility bills are another tax deductible benefit enjoyed by those who are self-employed. Needless to say, you'd need electricity to operate your home office. But you'll also need to pay for telephone and internet, too.
And don't forget your heating and cooling bill, too. Also, be sure to add up your water and sewage bill. If you're required to pay the bill in order to inhabit your home and operate your business, then keep receipts of your bills for tax season.
Going on business trips used to be something reserved for traveling salespeople and C-level executives. But now, more people than ever are able to claim travel expenses as tax deductions.
Let's suppose that you're a freelance writer. If you visit another state or country in order to perform research for a story, then the cost of all of your transportation fees are deductible. Are you sailing on a cruise for a leisure travel story? Keep all of your receipts, because your trip is research, and your research expenses are claimable.
And don't forget about expenses such as food, hotel, Airbnb, rideshare vehicles, car rentals, and any other reasonable expenses related to your stay away from home.
One expense that self-employed people might not be prepared for is health insurance. Employees typically pay a percentage of the cost for a group health plan, but self-employed individuals are responsible for paying 100% of the expense for individuals health care plans.
But here's good news: These are expenses that are tax-deductible. Check with your tax preparer about how much you can deduct. They'll ask you questions about your down payment, your monthly premiums, and any out-of-pocket costs.
If you still need to have taxes prepared from tax year 2017 and before, then you can have the cost of your tax preparation fees deducted. But note that as of tax year 2018, you won't be able to claim this deduction anymore.
Finally,any donation to a registered 501C charity is tax deductible. This includes financial donations, furniture, clothing, personal items, food, and any other reasonable donations that are acceptable.
Be sure to get a receipt from the charity, but know that all of the major and reputable organizations will offer you a receipt without being asked.
Every business owner knows that there are times when funds are tight, especially when you're a one-man shop, and you're just starting out. If you need more funding for your small business, you might find yourself in the position to not be able to obtain a traditional bank loan. There are other alternatives for you, such as Joliet car title loans.
Before you start looking for locations for title loans in Joliet, you should understand a few basics about this type of loan. A car title loan allows you to receive a cash loan based against the equity you currently have on the vehicle you own. Keep in mind that you must own the pink slip on your vehicle in order to start the application process.