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Tax Tips: How To Minimize Your Self-Employed Tax Debt

Tax Tips: How To Minimize Your Self-Employed Tax Debt

Were you surprised when you saw how much money you owed in taxes this year? Entrepreneurs who start their own window cleaning companies don’t always realize how much of their earnings has to come out in taxes every year. Business owners make a lot of money, but they also pay a lot in self-employment tax. In order to avoid a similar shock in the future, follow these tax tips that show you how to minimize your self-employed tax debt next year.

Take Advantage Of Tax Deductions

The easiest way to cut back on your tax debt is to use tax deductions to reduce your taxable income. Some popular tax write-offs for the self-employed include:

  • Fuel And Car Payments
  • Portion Of Rent And Utilities Used For Home Office/Work Station
  • IRA Payments
  • Charitable Donations
  • Promotional Expenses
  • Banking Fees
  • Window Cleaning Supplies
  • Other Fees Necessary To Run Your Window Cleaning Business

When you file your Schedule C as part of your tax preparation, you can enter all of this information to reduce your taxable income. This means that when you go to calculate the money you owe, there will be a smaller total for you to pay taxes on.

Keep All Of Your Receipts

You never know when something you buy can be considered a tax deduction, so hold onto all of your receipts. Take into account any fees you pay for processing credit cards, maintaining a bank account, paying with a business credit card, etc. These fees may only be pennies on the dollar, but they will definitely add up at the end of the year.

Pay Off Last Year’s Self-Employed Tax Debt Quickly

Try to pay back your tax debt from last year as soon as you possibly can. This will help you avoid excessive interest that will add to your debt the following year. Make more than your minimum payment every month, even if that means making a few sacrifices elsewhere in your business. The peace of mind you will get in the end will be well worth whatever you give up temporarily.

Keeping up with self-employment taxes isn’t that easy at first, but over time, every successful entrepreneur gets into a routine about it. Follow the tax tips we have outlined over the last two weeks, and you will be well-equipped for what the future holds for your window cleaning company.