What Are the Benefits of Hiring an Accountancy Firm for Tax Preparation If You Are Self-Employed?

February 27, 2012 by  Filed under: Taxes 

Self-employed individuals have a tax situation unique from the rest of the U.S. population. Find out if your case warrants getting help from accountancy firms for tax preparation and tax code navigation.

Being self-employed brings with it a number of perks and benefits. However, when tax time rolls around, it can also bring with it a slew of headaches and problems. If you understand the tax code, your personal tax situation, and all the things you need to do to get squared away with the IRS, that’s wonderful. If, however, you’re self-employed and you’re not entirely sure how to file your taxes, then getting in touch with a personal accounting specialist who can help you with tax preparation can be a great move.

One of the biggest elements to keep in mind when you’re self-employed is that your tax filing requirements can be much more complicated than they are for folks who file a standard return. For example, all people who are self-employed need to pay the IRS self-employment taxes. These are usually around 15% of your net business income, and they go toward Social Security and Medicare. Filing the self-employment tax is mandatory and requires filling out specific schedules and forms. For individuals who are intimidated by filling out a basic 1040, which is the standard federal tax return form, handling the ins and outs of filing your taxes as a self-employed individual might be too much. If that’s the case for you, hiring an accounting firm that can prepare your taxes for you might be a great option. The accredited accountants or CPAs at the firm will be able to handle even the most complex of tax filing situations and will take that task off your plate so that you don’t have to worry about it.

Working with an accountant to file your taxes as a self-employed individual will also help you immensely when it comes to deductions. When you are self-employed, you are able to deduct expenses that are related to your work. Keep in mind, though, that there are strict rules governing these deductions. For example, if you took a client out to dinner, you can deduct it as a business expense. However, you must have conducted a business activity directly before or after the social portion, and you must have records of that. You can also only deduct 50% of the total meal cost. There are other, even more complex rules governing various business-related deductions for self-employed individuals, and keeping them all straight can seem impossible. You want to deduct everything you can so that you keep as much of what you made as possible, but you also need to make sure that you abide by the IRS’s rules and regulations. If you have any doubts about this part of the filing process, it may be in your best interest to contact accountants in your area for tax preparation assistance. They’ll be able to make sure you’re getting the best deal possible while still following the IRS’s guidelines.

Being self-employed has many perks, but dealing with complicated tax returns is not one of them. If you’re daunted by the complexity of filing as a self-employed individual, or if you’re not sure how to navigate the allowable business expenses portion of your return, contacting an accountant in your area could be just what you need.

Penny Jones is an Internet marketer for Prospect Genius, a leader in innovative online marketing solutions.

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