Ten Tips for Self Employment Tax Deductions

The Secret Of Business That Even The Lone Ranger Was Aware Of

As you know when you are self employed your taxes become much difficult to adjust. To save money in this economic situation you are in need of all self employment tax deductions you could get. So here are the ten tips for taxes that could save you real cash.

1. Your home office could be the best place to start. Put a map that would outline your work space in your home where the restroom is also included. You won’t be able to deduct your entire home but could deduct the part you work in. Things like mortgage’s portion, utilities, home insurance, property tax and maintenance done for the home that year can be a self employment tax deduction based on how much percent of your home is allotted for work.

2. You could deduct all your health and dental insurance premiums if you are paying for yourself and you are unable to qualify for your spouse’s employer plan. If you could cover your whole family then you could deduct them. This is only for the self employed people, so we should take the advantage of it.
3. Also the meals and entertainment will be a good source for tax deductions. Just make sure that you are keeping the receipts and do some work before or during these activities. Thus you can get up to 50% off. Keep a chart of matters like who you were with and when it was taken place. Also what business was in discussion? Do this in a right manner so that you will not be audited.

4. Your phone and internet usage could be a deduction. Make sure that you only take out the portion which relates to your business. If you keep a second line that it is only for business then you will be taking the full cost off.

5. The interest paid for the business loans and credit cards will also help to save you some money. With credit cards you must deduct the interest that you are getting when you purchase something that is used for your business.

6. The miles you traveled on your car for business is a difficult self employment tax deduction. The tip that should be noted here is to take the standard mileage rate determined annually by the IRS. Keep track on the miles you drive and the particular dates. Then do the sum of all the miles and multiply the total miles by the particular year’s rate and it will be giving you your amount. You can also use the actual expense method but it requires more detail to work out. If not done correctly then it will be audited.

7. If you got a specific publication which is related to your work then you could deduct its cost. This would not be your local newspaper. If you are a fisherman and you are subscribing to a fishing licensing journal then you could deduct its expense.

8. 100% of your travel expenses are deductible for travels related with going out of the town only. If you stay over night then you could deduct the hotel cost and 50% for meals and entertainment. If this is not the case then you should take out the cost and get there and back.

9. Any education you have acquired which is related to your business can be taken as a tax deduction. But do not try to save on studies that have nothing to do with your present company.

10. Self employment retirement plans can be taken as the best tax deduction after all. If you make a profit around $250,000 a year you could contribute up to 25% of the net income to a Simple IRA or Keogh plan. If you are making less than the stated then you could contribute to a self employed retirement plan and an IRA. You must be included in the IRA’s income phase-out limit.
Expecting that you found these ten tax tips useful. These self employment tax deductions would help you to save a lot of money when you pay your taxes. Just make sure to follow the tax laws very carefully or you would be ended upon the IRS’s audit list.

The Secret Of Business That Even The Lone Ranger Was Aware Of