what you can deduct - IC MT2 Posted: Aug 21st, 2018 - 3:43 pm In Reply to: Taxes for self-employed - Curious
If you have a dedicated office space, like a bedroom that you've set up as your home office, figure out the square footage of that room as compared to the rest of your house. The room I use is 10%, so I deduct 10% from all of my home expenses (mortgage, utilities, insurance, etc.). You can deduct whatever internet provider you use. Also, health insurance if you purchase your own coverage. Any office supplies you use for work... new desk chair, computer, printer, toner & ink, etc. If you can afford an accountant, they might be able to tell you more, but these are the things my accountant has told me to deduct.
I have two bank accounts set up. When I get paid, I automatically transfer 25% to my "tax account." That way, I'm not in for a big surprise when it's time to pay taxes. I actually deduct more than 25% because I also pay my health insurance out of that account. Whatever you set up, make sure you set that money aside no matter what. Think of it this way.... as an employee, it was already done for you. You got your net pay and that's what you had to spend. By setting up a separate account, it helps keep you from dipping into that money.
If you have an accountant, they will likely set you up to pay your taxes four times a year. Mine provides me with the forms I need to send in with my quarterly tax payment, so that makes it easy.
Hope this helps!
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