Being a sole trader allows you a degree of freedom that you wouldn’t otherwise get. But you do have to manage your taxes by yourself. Here are some top tax tips that could save you hassle later on.
Paying taxes is not a bad thing. It’s taxes that provide the services and infrastructure we all appreciate. But that doesn’t mean that anyone wants to pay any more tax than they really have to. It is easier than you realise to overpay when you are filling out your own tax returns and trying to juggle everything by yourself though. If you want to avoid paying too much, you have to know the rules of the game. Read up on all your local tax laws, making sure you understand everything you read. If there is something you’re not sure about, speak to someone who knows exactly what they’re talking about.
Memorise Every Deadline
Deadlines are never much fun to stick to. They seem to hurtle towards you at an incredible rate, but there’s nothing you can do to change them. Rather than complaining about them, stick to them and don’t miss them. If I were you, I’d write them down and stick them on the wall of your home office so that you see them each and every day. That way, you’ll have no excuse for forgetting about them. The next deadline should always be your main focus. So, if your tax return needs to be done within a few months, getting it done as soon as possible. Many people leave it to the last minute only to run out of time. Those forms take a whole to fill in! So, give yourself the time you need.
If You Fall Behind, Create a Plan of Action
It’s easy to fall behind on your tax payments. When you’re trying to earn a living and look after a family, things can go wrong. But the answer is never to bury your head in the sand and pretend that nothing is wrong. As tempting as denial might be, it’s not going to get you out of the fix you’re in. What you should do is take a stark look at your finances and work out how quickly you will be likely to pay off your tax debt. And if it turns out that things are worse than you even imagined, David Yarborough, EA might be able to help you. He offers professional IRS debt solutions to help people with tax debts.
Claim the Cost of Journeys
If you have to travel about a lot because of your job, you should claim the cost of these journeys. You can do this whether you use your own car or public transport. As long as you can provide evidence of the money you spent on these journeys, you should have no problems. It doesn’t make sense to pay extra tax for these kinds of things when you don’t even need to. The amount of tax you pay will depend on how much your turnover is, how much you spend on travel and the local tax laws. But in most places, you can get some kind of discount from the tax man. So, make sure you, at least, do some research into what’s on offer to you before handing over your cash.