×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Skip to main content
Tags: taxes | self-employed

How To Lower Your Taxes If You're Self-Employed

By    |   Thursday, 28 May 2015 04:59 PM

If you’re self-employed, you already pay both the income tax and the self-employment (SE) tax that goes towards funding Medicare and Social Security programs.

Unless you’re an accountant or a financial planner, wading through all the details, requirements, and forms that apply to the self-employed can be daunting.

Urgent: Is the IRS Good for America? Vote Now

In order to reduce the self-employment taxes that you owe, here are a few general tips:

1. SE tax deduction
The IRS allows you to deduct between 50 and 57 percent of your self-employment tax payments when you are filling out your 1040 form, according to TurboTax, depending on your actual income.

2. Home office deduction

If you work from home and have space specifically designated for your office work alone, you may be eligible for this deduction for percentages of your utility bills, mortgage interest, home depreciation, maintenance, and insurance and property taxes, depending on the square footage calculation of the designated space, according to Investopedia.

You may also deduct from your internet and phone bills for your business use. Business travel expenses, subscriptions to publications, and expenses for education related to your business ventures may also be reduced.

Vote Now: How Do You Feel About the IRS?

3. Look into “ordinary and necessary” deductions
The IRS allows for “ordinary and necessary” deductions if business expenses are deemed to fit this standard, according to Tax Help. These expenses must have gone towards your trade or your business to be accepted.

4. Look into IRAs (Individual Retirement Accounts)
Simplified Employee Pension (SEP) IRAs, SIMPLE IRAs, and one-participant 401(k) plans help to lower your adjusted gross income upon which your taxes are based, reports The Huffington Post.

Looking into these various retirement plans and their respective advantages and disadvantages will help you to decide which option is right for you and your retirement savings.

5. Consider hiring a professional accountant
Although this will aid you in considering all your available options and resources, never forget that the responsibility for filing accurate returns ultimately falls upon you! The IRS has additional resources and information on its website for the self-employed taxpayer. 

Tell Us: Do You Think the IRS Is Good for America?

© 2022 Newsmax. All rights reserved.


FastFeatures
If you're self-employed, you already pay both the income tax and the self-employment (SE) tax that goes towards funding Medicare and Social Security programs.
taxes, self-employed
369
2015-59-28
Thursday, 28 May 2015 04:59 PM
Newsmax Media, Inc.

PLEASE NOTE: All information presented on Newsmax.com is for informational purposes only. It is not specific medical advice for any individual. All answers to reader questions are provided for informational purposes only. All information presented on our websites should not be construed as medical consultation or instruction. You should take no action solely on the basis of this publication’s contents. Readers are advised to consult a health professional about any issue regarding their health and well-being. While the information found on our websites is believed to be sensible and accurate based on the author’s best judgment, readers who fail to seek counsel from appropriate health professionals assume risk of any potential ill effects. The opinions expressed in Newsmaxhealth.com and Newsmax.com do not necessarily reflect those of Newsmax Media. Please note that this advice is generic and not specific to any individual. You should consult with your doctor before undertaking any medical or nutritional course of action.

 
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the NewsmaxTV App
NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved