The Ultimate Guide to Tax Planning for Self-Employed Individuals

Self-employment gives you freedom and flexibility. But it also means handling your taxes and accounts. This is when tax planning is essential to decrease your tax burden and avoid penalties. And, an accounting consultant to help you through this procedure seamlessly. However, here are a few ways to navigate through tax planning as a self-employed individual.

Know tax obligations

As a self-employed person, you must pay income tax and self-employment tax. It covers your Medicare and Social Security contributions. As a self-employed, you don’t have an employer withholding your taxes. Hence, taking care of the taxes and accounting activities is your responsibility. You need a tax consultant in such a scenario.

Keep aside money for taxes

The most essential thing to do is to keep money aside from your income for taxes. Keep at least 20-30% of your total income for taxes. Further, your accounting firm can help you decide the tax percentage based on your income bracket. It also helps avoid long tax bills during the year-end.

Tracking income and expenses

Keep a record of all your expenses and the total income. You can use various accounting software or get the best tax consultant to make your work easier. The deductible expenses you must keep in check are office expenses, meals, travel, rent, and other similar miscellaneous expenses. Further, tracking your expenses helps you reduce the taxable income considerably in the long run.

Pay your quarterly taxes

As you have no employer withholding taxes, you must pay your taxes quarterly. Paying quarterly taxes can reduce your burden of yearly taxes. In addition, some countries have mandatory quarterly tax payments failure to pay can result in penalties.

Tax laws are quite challenging to understand. In addition, every self-employed individual has a unique financial and income situation. This is when a tax professional helps you with deductions, tax credits, and tax laws. They ultimately help you save your money.

About MST:

You, as a self-employed individual or a business, need the support of MST. This firm offers the best finance lease accounting and various taxation consultancy. You can completely depend on them for excellent tax handling, accounting services, and profit improvement. The experts in this firm understand your financial needs and help you attain them with efficient strategic tax planning.

Find out more about this firm at https://www.mstiller.com/

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