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Self-Employed? Be Sure Your Tax Return Is Correct

If you’re self-employed, the IRS offers several tips to ensure your individual tax return is correct.

The agency needs to ensure you’re paying your fair share, which, of course, is important to do. With so many rules and regulations you may miss something, and oversights can cost big money in penalties and interest.

You must declare all self-employment (SE) income on your return. Even if you hire yourself out part-time in addition to your regular job, those earnings still count as self-employed income.

Also, track the expenses related to your self-employment and record it all on Schedule C, which you file with your 1040 tax return. Allowable deductions include expenses that are ordinary (common and accepted costs in your industry) and necessary (helpful and proper for your business).

If you made a profit you may need to pay SE Tax. Use Schedule SE to figure the tax, and attach it to your return if you owe.

You may also need to make estimated tax payments throughout the year. (In fact, the date of this blog post is one of the estimated tax deadline days.) The government expects you to pay on time, and if you’re underpaid when you file your annual tax return, you may be subject to a penalty.

Self-employment income requires diligent monitoring, so if you need the help of a tax accountant team accustomed to assisting small businesses, including sole proprietors and independent contractors, contact Patrick & Robinson CPAs at Office@CPAsite.com or (904) 396-5400.

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Frequently Asked Questions

Q.

Are there any benefits to filing early? And what happens if I file after the deadline?

A.

Filing before April can make your tax refund come back faster, but filing too close to the deadline could cost you money.

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