When dealing with the business of entrepreneurship, it is inevitable that you’ll have some worries about self employment taxes. Like most entrepreneurs, working on taxes is not one of our favorite things. However, there are two guarantees in life: death and taxes. So buckle up Buttercup, because if you make money as a self-employed person, you will have some contact with the IRS.
Are you the type of person who waits weeks (or months) to get your taxes done? Have you been known to procrastinate up until the very last minute? Do you find yourself simply not prepared when it comes time to file? Part of being successfully self-employed is to make sure you stay on top of your self employment taxes. And you can do it!
4 Tips for Working on Your Self Employment Taxes
1. Use tax time as a review of your business.
The IRS is not another name for the Boogey Man. If you are prepared with your business and personal expenses throughout the year, educate yourself and use professional help when necessary, tax season does not have to be an ordeal. It can be a great way to review the past year and strategize for the next one.
2. You might not have to pay.
So often entrepreneurs focus on the idea that we will have to pay the IRS come tax time. But in reality, about most Americans will get a tax refund. And that could be you! Working with a reputable accountant who is well-versed in self employment taxes can help make this a reality.
3. If you make a mistake, fix it as soon as you can.
Many people fear that if they make a mistake, have not filed in years, or haven’t paid past due balances, that the IRS will show up one day and throw them in jail. While there can be criminal offenses when it comes to taxes, the IRS would rather someone is working (and therefore earning money) to pay off their debt, rather than throw them in prison. However, don’t put your head in the sand. If you can’t pay or have other hardships, make sure you contact the IRS directly to work out a payment arrangement.
4. Tax time can you get organized financially.
So many entrepreneurs do not have a complete picture of our finances. Thanks to the IRS though, we have the opportunity to get organized (and stay organized) when our taxes are due. Using financial websites can help you be prepared once the tax man comes calling.
While filing your self employment taxes is probably not on your ‘favorite things to do’ list, it is a necessary step toward being a productive, successful entrepreneur. Sometimes it is scarier to think about doing something, than it is to actually do it.
How do you handle your self employment taxes?