Learn about among the enterprise deductions out there to the self-employed, and actions to take earlier than Dec. 31 to attenuate your taxes for when April rolls round. Watch the video or learn the transcript under.
Video transcript:
Tracy Byrnes: Plenty of entrepreneurs on the market today and lots of people working from residence creating wealth. So what do they should know come tax time? And extra importantly, what do they should know earlier than the top of the yr to attenuate their tax invoice?
Lisa Greene-Lewis, TurboTax knowledgeable and CPA is right here with us proper now. Lisa, these guys have an entire ball, an entire new ball of wax to take care of. In explicit, they need to introduce themselves to Schedule C. So their earnings and bills all go on Schedule C— what do individuals have to find out about their bills, extra importantly?
Lisa Greene-Lewis: Yeah. So earlier than the top of the yr, to begin with, ensure you’re gathering your receipts on your bills since you need to maximize your deductions while you file. But additionally if there’s something that you’ve got been to purchase for your enterprise, you need to do this by December 31. And by doing that, you’ll deduct these bills.
So for example, if there’s some tools you need to purchase for your enterprise that can actually provide help to, you should purchase that by December 31. And yearly, they increase — it is referred to as the Section 179 Deduction you could get. And it is as much as $1,000,160 for companies you could deduct.
Tracy Byrnes: That’s an expense quantity. That’s an enormous quantity. So begin tallying your bills. Health care is all the time a line merchandise on the Schedule C, what do individuals have to know?
Lisa Greene-Lewis: Yeah. So in contrast to people who’ve an employer. They can — if you happen to’re self-employed, you get a deduction on your insurance coverage in your Schedule C. So that is one factor to remember. Keep monitor of your insurance coverage premiums. When you’re employed for an employer, you may’t deduct that until you may itemize your deductions. So that may be a distinction.
Tracy Byrnes: Well, well being care is actually costly today. So do not forget that line merchandise. So Lisa, what do individuals have to find out about their SEP-IRA?
Lisa Greene-Lewis: With your SEP-IRA, if you happen to’re self-employed, you may contribute as much as 25% of your internet earnings, or $66,000. Whichever one is much less.
Tracy Byrnes: And lastly, self-employed individuals have to make estimated funds. And there’s one arising, is not there?
Lisa Greene-Lewis: Yes. So self-employed want to recollect, by the top of the yr, there would be the fourth estimated cost due in January. So you need to collect all of your receipts on your bills, so you may decrease your earnings and decrease that estimated tax cost.
Tracy Byrnes: Yeah. So get these finished. And lastly, TurboTax may also help with all this, can it?
Lisa Greene-Lewis: Yes. TurboTax may also help. We have our industry-specific characteristic that identifies deductions instantly associated to your {industry}. There are so many alternative industries on the market. And it will get smarter. It makes use of machine studying and AI.
So as extra industries are entered, it will get smarter and uncovers deductions that you simply by no means imagined that you possibly can get. And with TurboTax, you may also absolutely hand your taxes off to our TurboTax Live Full Service tax consultants. And they will do your taxes in a single assembly.
Tracy Byrnes: It’s great things. Lisa Greene-Lewis, TurboTax knowledgeable. Thank you for being with us.
Lisa Greene-Lewis: Thank you for having me.
Editor’s Note: The content material was reviewed for tax accuracy by a TurboTax CPA knowledgeable for the 2022 tax yr.
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