| Self employed people are allowed to deduct several | | | | nest egg for the future, so that you have something to |
| expenses from their income before working out how | | | | live off when you finish your career. Secondly, you can |
| much tax they need to pay. Sadly, most self-employed | | | | get some fantastic tax breaks for putting your money |
| people are unaware of all the expenses they can | | | | into a retirement fund. |
| deduct, and so most end up paying more tax than | | | | Self-employed people are allowed to save a large |
| they should. | | | | chunk of their income in their retirement fund, and this |
| By taking the time to learn about which tax-deductible | | | | can make a big difference to your tax bill at the end of |
| expenses apply to you, you'll be able to claim back the | | | | each year. |
| maximum allowable within the law, but without | | | | 3. Trying To Do It All Yourself |
| increasing your chances of being audited. The following | | | | By their very nature, self-employed people tend to like |
| are common mistakes which many self-employed | | | | to do everything themselves. However, in the case of |
| people make, and which can end up being costly in | | | | keeping your accounts, this can be a bad decision. |
| more ways than one: | | | | There are a huge amount of laws and regulations for |
| 1. Not Keeping Good Records Of Your Expenses | | | | you to get your head around, and that can take a lot |
| When you buy anything that is related to your work, | | | | of time - time which would probably be better spent |
| you must make sure you get the necessary | | | | working on your business. |
| paperwork to prove that you made the purchase. This | | | | A professional accountant will already be familiar with |
| normally involves keeping the receipt. Store all your | | | | all of these laws, and all the little intricacies involved in |
| receipts in a folder, divided up into months to make it | | | | applying them. They will also be much more familiar |
| easy to find things. | | | | with claiming deductible expenses, meaning that in the |
| Alongside this folder, you should keep a ledger detailing | | | | long-run they should actually be able to save you |
| what you bought and why. Also write down why you | | | | money, even after their fees have been taken into |
| think it is a legitimate business expense - although it | | | | account (which in themselves are tax deductible!) |
| may seem obvious at the time, you can bet that it | | | | By carefully tracking your expenses, diverting your |
| won't be so easy to remember several months down | | | | money in the most tax-efficient manner, and getting |
| the line when you're filling in your tax return! | | | | professional help, you will be able to significantly reduce |
| 2. Not Using Your Retirement Plan | | | | your tax bill. At the same time, you'll have extra peace |
| Saving for your retirement has two big advantages. | | | | of mind that you're saving for your future, and that |
| Firstly, and quite obviously, it means you're building a | | | | your tax return is as water-tight as possible. |