In the present economic environment, more people may be considering setting up their own business to earn some money, either as a main or small income source. Below you’ll learn about important tips for cutting your taxes as a self-employed.

1. Be cautious while using credit cards

Credit cards can be an attractive option, mostly if you’re having some financial problems, but using your private card for business expenses can immediately lead to big fines.

If you need a credit card for business matters, consider getting one particular for that goal. And if you need financial support to start your business, look into possible business loans.

You can also check your business bank current account to ensure you’re still getting the most effective service possible.

2. Plan your travel

Whether you have a vehicle or using city transport, getting from one place to another both for business and private means can significantly flatten your wallet.

If you choose to travel by train, check whether a commuter pass is worth investing for your needs. 

If you’re not using the train that often, make sure to plan your travels and book tickets in advance. Usually, it’s far cheaper than buying on the same day.

And if you drive to work, and your vehicle eats a lot of gas or always needs to be maintained, it might be time to get yourself a new one. You need to mind your mileage, as this can be used during your tax preparation.

3. Make sure that your insurance is up to date

Insurance plays a crucial role in running a business, and the costs of neglecting it can be tough. If you have any staff, even on a part-time basis, you’re ought to have workers’ liability insurance, and there are lots of other kinds of insurance that are useful to cover the expenses of dealing with mistakes, casualties, waste, stealing, and damage.

Even if you have an insurance plan, it’s critical to make sure you have the same cover as you used to. Your business might have changed since your last renewal, and checking back your policy terms to make sure it still covers everything that it has to is an excellent idea.

4. Get professional advice

The fact is, taxes can be quite tricky. Consulting with the best tax accountant every once in a while is useful to handle your finances.  The specialist can even help ensure you aren’t overpaying your taxes. Your accountant’s salary is more than worth investing in as he likely knows all the exemptions, possibilities, and tax benefits that you may not even suspect of. There is every reason to hire a specialist! Your accounting and bookkeeping salaries can also be determined as business expenses.

5. Deduct your health insurance

Being self-employed, you have the IRS permission to deduct the expenses of your health insurance. This deduction includes your dental, long-term care, and all the premiums that you, your better half, and your kids are entitled to.

Remember that you can’t take this deduction if you’re acceptable for a subsidized health insurance plan. 

The IRS also permits you to deduct the transportation expenses that are principal and essential to health care. This includes bus, train, taxi and ambulance services cost, and your private car expenses. You can also write off 17 cents per mile (as of 2017) for your healthcare mileage.

6. Deduct your home office 

If you’re using your home or part of it as an office, there might be some home office deductions available for you. Keep in mind that you obliged to follow all regulations because the IRS can be tricky about this. The key things to do are:

• You must use your home office space specifically for business only
• It usually applies to self-employed people but there are cases where W2 employees can use it
• There are two ways to calculate the home office deductions
• An eligible home office can increase your general driving tax write-offs.

7. Control your direct expenses

Everyone has been in this type of situation. You’re still signed and continue to pay for a service that you’ve stopped using a long time ago. Make sure to go through all your direct expenses and check if there’s anything you’re no longer interested in.

And if you’re signed up for subscription services like Spotify or Netflix, determine whether the ad-free experience or the option to watch on four screens at once is worth investing in. Downgrading to a cheaper version, while still keeping the thing, can ultimately save you a pretty sum.

The bottom line

It is possible to successfully save up while being self-employed. Make sure to have a separate credit card for your business expenses and always plan your travels. Calculate your mileage to use in your tax deductions and ensure that your insurance is up to date. Use all healthcare and home office deductions you’re entitled to as well. Don’t be shy to ask for professional advice if you’re encountering some tax difficulties or just wishing to save up as much as you can.