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Tag Archives: self employment taxes

Don’t Forget the Financial Costs of Working from Home

Don't forget about the financial costs of working from home

  Having a job where you can be your own boss, work the hours you want, stay home, work in your pj’s (if you want to), etc., sounds like to a dream job to lots of people. Who wouldn’t love to escape the commute to and from work? No more being stuck in a bus or train beside someone who’s sick and coughing all over you. No more traffic or weather to fight each day, costing you precious hours and minutes you could be doing something else. Working from home may sound like a dream job, and in many cases, it is. But there are downsides to working from home too. One of which is the financial costs of working from home when you are self employed. Before you consider leaving your current job to go it alone, make sure you weigh the financial costs of working from home. Taxes It’s easy to forget about paying Uncle Sam his share of your earnings when everything comes off the top and is calculated for you by your employer before you get your take home pay each pay period. However, it’s not as easy to forget when you have to calculate and ...

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Dangers of Earning Extra Money

taxes, lifestyle inflation, and extra time

      When searching for ways to pay of debt, build an emergency fund, or save for a major purchase, anyone will tell you that earning extra money is the fastest way to accomplish those goals. Increasing my income was one of the ways we were able to pay off massive credit card debt a few years ago. While the overall benefits more than outweigh any potential negatives, there are a few dangers to look out for when making extra money. Hopefully you can avoid those  pitfalls to make sure that all extra income is serving its purpose. Taxes Unless you take on a traditional job for extra money, income earned from side hustles is usually paid without any tax withholdings. That means that you’re responsible for Medicare, Social Security, and income taxes. It might be tempting to go ahead and use your new found money right away, but remember that a tax bill is coming up. If you’re new at earning extra income, you should save about 30 percent for taxes. After the first year, if you continue to pull in side income, you’ll need to set up estimated quarterly payments to Uncle Sam and to your state ...

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Tips For Calling The IRS

calling about tax fines and penalties

One of the fun things about being self employed is the taxes. I say that in the most sarcastic way because anyone who has ever had the opportunity to be their own boss understands how confusing and difficult IRS rules truly are. When you add multiple streams of income or money from things like rental property or dividends, it gets even more exciting. I wasn’t really surprised when we got several notices after filing our taxes. It seems no matter how careful we are with keeping track of our business income and expenses, and even with hiring a CPA, the IRS always finds something wrong with our tax return. This year, one of our three notices was for a late corporate filing with a fine of $195! I knew I had the proper documentation to prove otherwise, so it was time to make the call. Speaking to the federal government is not for the faint of heart, so here are my tips for calling the IRS. Have All The Proper Documentation The reason I was so confident about calling the IRS was because I had a copy of the from we sent in to request an extension to file our ...

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