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Filing and paying taxes can be a confusing and daunting task for those who are self-employed. Unlike employees, who have taxes directly withheld from their paychecks, self-employed individuals are the ones responsible for filing and paying taxes on their income. Understanding the basics of tax obligations for the self-employed can make this process less overwhelming. In this blog post, we will discuss tax requirements for self-employed individuals, strategies for staying on top of taxes, and the benefits of hiring a certified public accountant (CPA). Tax Requirements for the Self-EmployedAll self-employed taxpayers are required to pay two different taxes. First, self-employed individuals are responsible for paying self-employment taxes. The self-employment tax rate stands at 15.3%, which includes 12.4% for Social Security and 2.9% for Medicare. In addition to self-employment taxes, the self-employed are responsible for paying income taxes on their earnings. The amount of income taxes you owe will depend on your income level and deductions. Deductions can include business-related expenses such as office supplies, equipment, and travel. How to Stay On Top of TaxesWithout proper planning, it’s easy for those who are self-employed to fall behind on their taxes. This can lead to serious consequences, ranging from fines to criminal penalties. Read our blog post, “Delinquent Tax Returns and the Consequences You Could Face,” for in-depth information about the repercussions of falling behind on tax payments. The best way to stay current on your taxes is to make quarterly estimated tax payments throughout the year to the IRS. This is calculated based on your estimated profits for the quarter. Staying up-to-date with bookkeeping is extremely important in order to accurately calculate your estimated tax payments. Benefits of Hiring a CPAEven with the best intentions, self-employed individuals can still make mistakes when it comes to taxes. This is where hiring a certified public accountant (CPA) can be extremely beneficial. A CPA can help you stay current on your taxes through tax planning, help you navigate the complex tax laws that apply to the self-employed, and ensure that you are taking advantage of all the deductions and credits available to you.
If you are self-employed and in need of accounting services, contact Larry Bradford today. Larry is a seasoned professional, with over 35 years in practice as a CPA. His expertise and knowledge can help you stay on top of your taxes while also minimizing any potential risks and penalties. Call 512-402-0049 or send an email to larry@bradfordtexas.net to schedule an appointment.
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As a taxpayer, you may often find yourself wondering which expenses are tax deductible. This is especially true when it comes to professional fees, such as those you might pay to a certified public accountant (CPA). So, are CPA fees tax deductible? Tax Deductions Differ for Businesses and IndividualsWhether CPA fees can be deducted from taxes depends on what the CPA’s services were used for. In general, CPA fees can be deducted for businesses but not for personal use. According to the IRS, businesses can typically deduct any ordinary and necessary expenses that are related to the operation of the business. This includes fees paid to accountants and other financial professionals for services such as preparing and filing taxes, providing financial advice, and performing audits. It's important to note that in order for CPA fees to be tax deductible for businesses, they must be reasonable in amount. This means that the fees must be comparable to what you would expect to pay for similar services in your area. If the fees seem excessive, the IRS may disallow the deduction. CPA fees are not tax deductible if they are used for personal purposes. For example, if you pay a CPA to prepare your personal tax return or to provide personal financial advice, those fees would not be tax deductible. Additionally, if you pay a CPA for consulting services that are not directly related to your business, those fees may also not be tax deductible. Consult With a CPAIn conclusion, CPA fees can be tax deductible for businesses, but not for personal use. However, there are some limitations and exceptions to consider, and the rules for claiming these deductions can be complex, so it's always a good idea to consult with a tax professional for specific guidance on your situation.
If you're in need of professional accounting services, look no further than Larry Bradford, CPA. With over 35 years of experience in the field, Mr. Bradford has the expertise and knowledge needed to help you navigate the complexities of tax deductions and ensure that you're claiming all the deductions you're entitled to. To schedule an appointment, call our office at 512-402-0049 or send an email to larry@bradfordtexas.net. |
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