Welcome to tax saving Guide
Tax Deferred Savings Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
You may also listen to this article by using the following controls.
Tax Savings for the Self Employed
from:All of us are looking for ways to reduce taxes. Each of us has different tax situations, depending upon our income bracket, whether we file singly or jointly and the type of employment we have. Self employed people face different challenges, but there are some special tax savings for the self employed.
Self employed individuals pay their social security and Medicare tax as part of their income tax. And, they bear a larger percentage of Social Security and Medicare tax, since most employers pay half of the Social Security and Medicare tax for their employees. As a result of this, many self employed people pay quarterly estimated taxes to avoid a huge end of the year tax burden.
Tax savings for the self employed come in two basic varieties. The first is reducing your adjusted gross income. For many self employed people, the best way to do this is by contributing to an IRA. If you’re single, and have no access to a company sponsored 401k, your contributions to an IRA are tax deductible up to $4000, or $5000 if you’ll be 50 years old by year end. If you’re married and your spouse is involved in a company sponsored 401k, then you can contribute up to $4000 or $5000 if you’ll be age 50 by year end, provided that your joint adjusted gross income is less than $156,000.
The second type of tax savings for the self employed come in the form of deductions. Because the self employed must pay for many expenses that are covered by the employers of traditional employees, there are special deductions and tax savings for the self employed. For example, if you use a computer to do business, you can deduct it as a business expense. If you’re required to wear uniforms that you must pay for yourself, these can be deducted. In most cases cell phone bills and mileage can also be deducted by self employed individuals. Health care expenses can be deducted, too.
Each person’s situation is different so tax savings for the self employed are different, too. Check with your tax advisor and financial planner to help ensure that you’re taking advantage of all the tax savings for the self employed that are due to you. It’s not unusual for self employed people to miss deductions and tax savings plans that could have given them great benefit. We all want to reduce the taxes we pay, so it’s wise to find out about all the tax savings for the self employed that are available to you.
Tax Deferred Savings News
ScholarShare Announces College Savings Account Giveaway
SACRAMENTO, CA-- - ScholarShare , California's 529 college savings program , announces that they will host their first ever sweepstakes on Twitter, giving all qualified entries the chance to win a $1,529 ...
Read more...5 Tax Rules That Work
I'm not a big fan of rules of thumb in the realm of personal finance, primarily because we are such inherently varied and volatile beings that most scenarios end up being the exception???not the rule.?? But at risk of breaking my personal rule not to impose them, you will find five tax-driven directives that I ...
Read more...Investing Basics to Last You a Lifetime
Building your retirement by buying what you know.
Read more...Budget 2012: KiwiSaver auto-enrolment plan deferred
Finance Minister Bill English shored up his chances of achieving a surplus in 2014/15 by deferring last Budget's costly KiwiSaver auto-enrolment plan, saving hundreds of millions of dollars.The move is part of series of tweaks to...
Read more...How women should plan for retirement
While living longer is definitely a plus for many individuals, it adds to the risk of outliving one's retirement savings. This is of a greater concern for women, who statistically live longer than men.
Read more...