Are you a freelancer or self-employed?
Doing your taxes can be a huge headache and mess. Download the guide to get the top 4 things you should know if you’re self-employed.
4 Things To Know If You're Self-Employed
Just a few things you'd want to know
1. Time your income
You can’t postpone income simply by not cashing checks that come to you, or by telling customers not to pay you until after the end of the year.
Income is generally taxable when it is available to you.
However, you can time billing near the end of the year to your advantage. You certainly can sell assets at a gain before or after the end of the year, depending on your tax situation.
2. Time your expenditures
There’s always a surge in business equipment sales at the end of the year – and it’s not entirely because computers and printers are a popular holiday gift.
If you buy business assets by December 31, you can start depreciating them this tax year. You may even be able to take a Section 179 deduction and expense the entire cost of the asset in one year.
Business expenditures are counted as made in the year you purchase them, even if you use a credit card or other deferred payment plan and don’t pay for the expenditures until the following year.
On the other hand, if you’re on a cash basis, paying some bills can help lower your bill this year.
Don’t bother buying inventory or supplies that will be part of inventory before the end of the year, unless you need them. You generally don’t deduct the cost of inventory until you sell the product.