Self Employed? What You Need to Know This Tax Season

If you are self employed, tax season looks very different than it does for traditional employees. Understanding your responsibilities can help you avoid penalties and reduce your tax burden.

You Must Report All Income

Self employed individuals must report all income, including:

• Freelance work

• Cash payments

• Online sales

• Side businesses

Even if you do not receive a 1099, the income must still be reported.

Track Your Expenses

Business expenses can reduce your taxable income.

Common deductions include:

• Office supplies

• Internet and phone

• Marketing expenses

• Equipment purchases

• Business mileage

  
  

Set Aside Money for Taxes

Self employed individuals do not have taxes withheld automatically.

A good rule is to save 25 percent to 30 percent of income for taxes.

Consider Quarterly Payments

Quarterly estimated payments can help avoid penalties and large balances at tax time.

Self employed taxes can be complicated, but proper planning makes a big difference.

Hillman Financial Services helps business owners stay organized and compliant during tax season.

Schedule a consultation today.