Master Your 1099s: Self-Employed Withholding Guide(2024)

5 Essential Tax Tips for the Self-Employed

Being self-employed can make managing your taxes pretty confusing and stressful, especially if you're dealing with back taxes or debt. However, by following a few key best practices, you can stay on top of your tax obligations and avoid unnecessary mishaps (like an unwelcomed collection notice.) Here are five essential tax tips every self-employed person should know.1. Keep Accurate Records  Maintaining detailed records of your income and expenses is crucial. Keep track of all receipts, invoices, and other documentation. This will make tax filing easier and provide support in case of an audit.2. Make Estimated Tax PaymentsSelf-employed individuals must pay estimated taxes quarterly if they expect to owe $1,000 or more. Avoid penalties by calculating your estimated taxes and making payments on time.3. Don't Overlook DeductionsSelf-employed individuals can deduct many business expenses, such as home office costs, equipment, and travel. Keep track of these expenses throughout the year to maximize your deductions come tax time.4. Set Aside Money for TaxesAvoid surprises by setting aside a portion of each payment you receive for taxes. A good rule of thumb is to save around 25%–30% of your income. Having this money available will make quarterly payments less painful.5. Understand Self-Employment Tax In addition to income tax, self-employed individuals must pay self-employment tax to cover Social Security and Medicare contributions. The self-employment tax rate for the 2023 tax year was 15.3% on the first $160,200 net income.Update: Learn how lower IRS interest rates can help you reduce your tax debt in 2025.Remember, the goal isn't just to avoid owing taxes but to create a system for efficient quarterly filings. By following these steps, you can approach tax season with confidence instead of dread.

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There's no shame in asking for help. If you're unsure about any calculations or need assistance, visit Turnout or contact us anytime at 800-499-8876.Our enrolled agents are happy to assist. They can help fine-tune your relief plan to your specific situation and ensure you follow all applicable tax laws and regulations.

The Bottom Line

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