Self-Employed Taxes- A Beginner’s Guide 

When you are self-employed, you will have to pay a little extra taxes. Self-employment is basically used for those who do not work on someone else’s payroll. There are various side jobs that come under self-employment, but there are also jobs that do not. 

If you are a graphic designer or freelancer, you are likely to go under self-employed individuals. If you are someone who has a primary job and is also doing a side job, then again, it will come under a side job. When you are self-employed, you are going to be both the employee and employer as well. 

The taxes you pay as a self-employed individual are deductible, so you do not have to worry much. Whenever the term self-employment tax is put to use, we are basically talking about medicare taxes and Social Security. There is no income tax here. 

In Pembroke, you are going to find individuals who own small businesses and try to thrive in the competitive business environment. Having an accountant for pembroke pines accounting self employed individuals can benefit greatly from them. 

Who has to pay self-employment taxes?

It can be better understood depending on who has how much income. As seen with income tax, self-employed individuals will also have to pay taxes if their income has reached a certain threshold. There are some circumstances that need to be met that will determine whether you will pay the taxes or not:

• Hundred and eight dollars you should be earning from the employment done at church.
• If you, as a self-employed individual, have successfully made four hundred dollars in a year, then you will be eligible to pay taxes. 

How will you be paying self-employment taxes?

There is Form 1040, which allows you to pay taxes associated with Medicare or Social Security. Let us say you are still due the refund for the tax you filed as a self-employed individual; in such cases, the IRS will ensure that they refund the amount directly to your savings account. 

Furthermore, those who are self-employed also have to file quarterly taxes during the year. If you are someone who owes more than a thousand dollars after you have filed the return, you will have to pay the difference to the IRS. 

How can you reduce the self-employed bill?

The best way in such a scenario is to lower the taxable amount. This can be done by deducting expenses from the total income to tell the profit or loss in a business. 

• You can try to maximize your retirement contributions, which will bring your taxable income down. 
• Deductions need to be taken seriously, whether they are related to any property that is used for business purposes or any equipment. 
• Business-related purchases should be kept in mind and taken seriously. This is going to ensure that tax deductions are actually legitimate.
• In order to benefit significantly from deductions, try to maximize Health savings accounts. 
• Charity organizations can also help when you make donations there. In this way, you will not really have to pay taxes on the money that you are contributing to different organizations.

What are the different things we make deductions on?

There are various things in a business that can be used for getting deductions; let us look at some of them:

• Let us say you go for a dinner, you will be able to deduct costs on the meals but it should be directly concerned with your business. 
• Travel expenses can be cut too, but it should be mainly for business purposes. 
• The payment you make to the accountants is also deductible. 
• The supplies related to your business are also deductible, it can even include books or pens, etc. 

Seek help from a professional!

An accountant can help you look into areas where you can make deductions. They will help you identify those areas and be able to make deductions wherever applicable. Hire an accountant today.