Even if you have been self-employed for years, you may not be immune to tax mistakes. In fact, many of the tax mistakes people make could be losing them money before they even realize that this could be the case.
If you want to avoid tax mistakes, these are some of the things you should consider as tax season approaches.
You Don't Set Up Payment Plans
One of the biggest mistakes self-employed people make is not setting up a payment plan. The IRS has made it easier to set up payment plans with those who are self-employed.
If you are a sole proprietor of a business, you can choose to pay off your tax debt over time. This can help you avoid some of the penalties associated with non-payment, even if you do not have all the cash available right now.
You Don't Save Money for Taxes
Even if you hire a professional to help you manage your taxes, you should be putting money away as well. You should aim to pay your self-employed taxes on time or to pay your estimated quarterly taxes, and saving money each pay period will be a great help for doing this.
You get some idea of how much money you need to save by looking at your estimated taxes. This figure is based on last year's figures. As a self-employed person, it can be difficult to determine how much you will spend on taxes. Last year's figure can provide some guidance.
You Don't Charge Enough
If you cannot afford to pay your taxes each year, you might consider your rates. As a self-employed person, you have the power to change your prices and determine if this will be a better option for paying your taxes at the end of the year.
You Don't Hire a Tax Professional
Tax planning can get complicated. If you do not have somebody to help you manage your taxes, it is important that you understand what it means to pay taxes as a self-employed person. You may be subjected to additional fees and penalties if you do not have somebody helping you with taxes.
Tax Planning Services Are a Major Help
If you are interested in making better decisions this tax season, a tax planning service can help. Tax strategy planning can help you through the next steps, ensuring that things are not more difficult simply because you are self-employed.
Contact a tax planning service for more information.