Being self-employed sounds wonderful, and it is to a certain point. You hear people say things like ”you get to set your own hours” and ”you don’t have a boss breathing down your neck.” These statements are somewhat true, but no one ever discusses how hard it is to budget your money.
Your Taxes Will Hit You Hard
Up until you became self-employed you probably had a job where the taxes were automatically taken out of each pay check. You would do your taxes during the winter, and by spring you would be getting a nice little refund. Unfortunately, taxes work quite differently for the self-employed. You are responsible for setting aside the money needed for your taxes, and when you settle up for the previous year, you may owe them money.
Have a Professional Do Your Taxes
The laws and regulations regarding taxes can change frequently. Even though you would have to pay for their services, you are much better off hiring an accounting firm long island ny has available than trying to do it yourself. They know exactly what you can write off and understand all of your expenses.
Set Money Aside
You know you have to pay taxes each year so get in the habit of setting money aside each week. Your accountant that does your taxes can come up with an estimated amount for you to pay quarterly that will help ease the pain when April rolls around. When they do your taxes for the year, you will only have to pay the difference between what you already paid and what you owe.
Once you become disciplined enough to set aside the money you will need each year for taxes, you will be much better off. That first year will be the hardest because you are in for a lot of surprises, but it does get easier over time. That is when you will begin to enjoy the benefits that come with self-employment.