For many Americans, a side hustle is a great way to earn some extra income. It can also help you transition into a new career, perhaps as a small business owner. There are many reasons you may choose to work as a freelancer, and while there are perks to the gig economy, things can get complicated at tax time. Here is what you need to know about filing taxes for your side gig this year.
Tax law changes leave many small business owners uncertain
The new tax law signed by the President in December 2017 has left some business owners unclear of whether they qualify for a new deduction. According to The Star Tribune, though the IRS laid out guidelines for the business deduction, even some tax advisers have questions about what qualifies.
Avoid these common tax mistakes on this year’s return
With the new tax laws, people seem to be more confused than ever about what they should and shouldn’t do. Certain fundamentals still hold true, however. You must still tell the truth on your tax returns. Some tax payers fudge the numbers on purpose, and others are simply confused about the law. Here are a few mistakes that could land you in hot water:
5 tips for preparing your small business for an IRS audit
If you recently received a notice from the IRS that they plan to audit your small business, you may be panicking. Take a deep breath. With good planning and a little help, you can get through this.
The IRS conducts three types of audits: correspondence audits, office audits and field audits. They conduct many audits by correspondence, which is only through the mail and used for correcting errors or verifying information. The IRS does regularly conduct field audits for businesses, however, where they come to your place of business to review your records. Here are five tips for preparing your small business for an audit:
Reviewing changes for the tax reform law
2018 will be the first fiscal year the Tax Cuts and Jobs Act of 2017 will come into effect. As we approach the halfway point to Tax Day, the IRS released a statement reminding small business owners to learn about how the changes from the new tax laws will impact their company.
Given the numerous changes that occur to different types of business owners, it can be difficult for small businesses in Seattle to keep track of what to watch out for when preparing taxes for their companies. It is important to familiarize yourself as soon as possible so you can begin making changes in your tax plans and to avoid suffering any consequences from procrastination.
Online retailers may now have to pay tax on online sales
A recent U.S. Supreme Court ruling has many small online retailers panicking. The high court ruled that states are now allowed to collect tax from online sellers who sell to consumers in their state. In other words, if a Seattle resident orders from an online store based in Tennessee, the Tennessee-based stored will need to start charging buyers sales tax, as well as paying this tax to Washington state.
What small businesses cannot do to qualify for new tax break
With the announcement of the 20 percent income tax break, many small businesses in Seattle are changing their tactics quickly to qualify for it. They go to their accountants who suggest potentially risky ideas that coincide with the new law and could be beneficial in saving the company money.
However, the IRS recently proposed laws on these deductions to limit what some business owners are able to do to qualify for the tax break. Before you consult with your accountant on ways you can take advantage of this new law, you should be aware of how you could lose your eligibility for it.
Solutions for mounting tax debt
Debt is stressful and can negatively impact daily life. Screening calls in fear of creditors and ignoring mail as it compiles is no way to live. Tax debt only gets worse if you ignore it. Plan to eliminate tax debt with the following potential strategies.
Pay down debts with a budget
7 examples of reasonable causes for IRS penalty abatement
When federal tax obligations are not met, whether by accident or intention, hefty fees and/or penalties may occur. The good news is the IRS will take into consideration an array of reasonable causes for failure to file a tax return or late payments. If an individual or a business can establish a reasonable cause, it may be wise to request a penalty abatement from the IRS. The IRS will consider waiving penalties and/or fees for various sound reasons.
Ways to request penalty relief
A tariff bill could have wide-ranging impact on U.S manufacturing
Before Donald Trump was president, he garnered headlines by promising to return product manufacturing to the United States. He visited North Carolina and singled out a local company, Leviton Manufacturing. The company, a maker of light switches and electrical outlets, had closed factories in the state and was outsourcing its manufacturing overseas. According to The Atlantic, Trump vowed to raise taxes for companies like Leviton.
