Taxes. Yuck. I have nothing else to say about those, but I need a few more words or else it was a pointless post that isn’t helping anyone with anything other than justifying your feelings that taxes are gross. No one wants to earn money by working hard and putting forth so much effort only to give almost half of it away so that we can pay for things that may or may not make me feel overwhelming annoyed. I want to earn my money and then I want to keep my money. Taxes are no fun, but they are far less fun for those of us who freelance or are self-employed and have no one else handling our taxes for us.
I hate tax time, and I’m willing to bet most of you do, too. I know that some people love it because the government owes them big, fat checks, but that’s not how we see things around here. We don’t get those checks, so we don’t like tax time. The good news is that we probably don’t have to pay as much as we are paying now that we are self-employed and freelancing. We can do a few things to minimize our tax liability.
I know that at this point we are more than halfway through the year, but it’s not too late to get to work making sure your taxes are not nearly as high as they were in the prior year. Now is as good a time as any to get prepared and to work on next year’s taxes. Let us help you minimize your taxes so you can have a little more money in your pocket and write a much smaller check.
Put money toward your health
Did you know that a Health Savings Account (HAS) is a great way to save money on your income taxes? You can put money in there pre-tax so that you lower your income and your tax liability. It’s a great way to ensure you’re paying as little as possible to the government, yet still using that money for something useful. We do, after all, feel that your health is something worth saving for. That’s why we recommend you do save for it and you do use that money so that it’s not taxed.
Put money toward the future
When you are a freelancer, you don’t have anyone taking taxes out of your income for you. You also don’t have anyone taking retirement out of your income for you. Do it yourself. You can find a number of retirement accounts that take your money pre-tax so that you don’t have to pay taxes on that income. It’s a great way to not only save money now, but to save money for your future. Ask your financial advisor what you might find most beneficial based on your age, your location and your personal plan for retirement and then get to saving; now and later.
Use your home
Do you work from home? I do; all the time. I specifically bought a house that has enough bedrooms for my four kids, my husband and myself and for me to have an office. What made it even better was finding a house with a private office with its own entry and exit, too; the kids can play and I can see them and hear them, but I can sneak out the side door for a little relaxation, fresh air or just because I want to anytime I want. It’s win-win. The point is that my home is my office.
I have 300-square feet of space that is used for nothing but my work. I work here every single day of the week, and it’s my job. I can write it off, deduct it and make sure that my taxes are a bit lower thanks to the fact that I’m in here all the time. There are some strict regulations on your home office space when it comes to filing taxes, but it’s fairly easy to deal with and understand when you take the time.
Get an accountant
If you are not someone who knows anything about taxes, we have to recommend that you us an accountant. This is a person who is educated, licensed and certified to deal with what is only the most mundane, boring and frustrating thing in the entire world. Let your accountant deal with the fact that you have taxes and let them work to find you the most deductions, the most benefits and the most savings. It’s a good idea for many people because it is so easy to miss deductions and to miss out on things that might save you money. Your accountant should be someone you keep in close contact with on a regular basis, really.
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