Tax Tips for Self-Employed Filers
True or false: It's worth keeping track of every potential deduction, no matter how small.
True. No one wants to be buried in paperwork, but here's one place where attention to detail can pay off. Monica Rebella, an accountant at Rebella Accountancy in Tustin, Calif., saw this first-hand recently while working with a self-employed client who transcribes court documents.
"She didn't think taking expenses against her little business would make a difference, and I had to really work on her to give me expenses," Rebella says. By documenting and tallying all the woman's supplies, meals with her contacts, mileage, and home office and computer expenses, she saved her client more than $15,000 in taxes.
True or false: Being self-employed means you have very limited retirement account options.False. While you give up the potential for an employer 401(k) match when you work for yourself, you do get access to other retirement plans. Joseph Kovar, an accountant at Sweeney Kovar in Danville, Calif., steers clients toward the solo 401(k). "It's not well known, but it allows self-employed taxpayers to contribute substantially more than they can with a SEP or regular 401(k)," he says True or false: You should live in mortal fear of an audit. False. Being audited is no fun. But if you're honest and upfront on your tax return, you'll probably never go through one. According to the most recent numbers released by the IRS, about 1 million tax returns were examined during the 2007 fiscal year. That was only 1% of all returns. -- Reported by Elizabeth Blackwell in Chicago.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV