I’m Self-Employed, and I Do 4 Things to Take Control During Tax Season

how to find an accountant for self-employed

She is a proud graduate of Purdue University and a lover of random acts of kindness, volunteering and cats and dogs. Follow her on Twitter at @ellenychang and Instagram at @ellenyinchang. People who own businesses typically work with a CPA throughout the year on charitable planning issues, calculations of quarterly estimates and sometimes tax notices, Dula says. “Unfortunately depending on the firm and the complexity of the tax return, the cost can be several hundred dollars to several thousand dollars,” she says. Always shop around and get pricing upfront from a potential tax preparer. Consult with other people in your industry if you are self-employed or own a small business or seek advice from members of a professional organization.

how to find an accountant for self-employed

This guide demystifies what you need to know about reporting income you earn outside of a traditional 9-to-5. You’ll need to know how much the candidate will bill you for their services. Most business accountants charge fees by the hour—usually ranging anywhere from $100 to $275. The most qualified business accountants will have more than just tax and auditing services to offer, so get a sense of what else the candidate can do for your business.

Online learning tools

The government will definitely be watching when the audit is over, so you don’t want to violate any other tax laws. Just because you’re a small business owner doesn’t mean you know accountant for self employed the best practices for filing your taxes. For instance, if you choose to go with a sole proprietorship, you’ll be working on a self-employed basis and invoicing under your name.

  • The deadline for registering is 5 October, following the end of the tax year.
  • The most obvious benefit of hiring a CPA is that they can help you make better decisions about how to handle your money.
  • You might find it more cost-effective to choose an accountant or firm that provides only the services you need.
  • In an initial consultation, you’ll get free advice and a better understanding of what they’re able to offer you in case you choose to hire an accountant down the line.

Over a decade of self-employment, I’ve learned not to be too overwhelmed by the process. There have been years I’ve had to use a payment plan and times I’ve had to cut an unexpected check to the IRS when the agency found errors on my return. While those situations aren’t ideal, they’re simple enough to cope with as they come up. There’s no way to avoid taxes, so taking them one step at a time — and realizing I can’t control everything — is my key to navigating them. With the bookkeeping in order, I scan my income and expenses for the year, putting together a rough profit and loss statement for my business. There are a few different ways to calculate quarterly tax payments, and I’ve always found it easiest to pay 100% of what I owed the previous year.

Find a Certified Business Accountant

As you will be working closely together, a strong connection is important. You can then refine your search, if you want to find an accountant with specialist expertise. Broadly speaking, if you find you are spending more than four hours a week on the accounts, or have plans for growth, then it is time to engage a professional. Bookkeepers tend to focus more on daily activities and making sure your accounting is up to date, as well as flagging unpaid debts and managing your payroll. Bookkeepers record purchases and sales while accountants glean insights from bookkeeping data.

how to find an accountant for self-employed

If you go this route, you might be able to save on your taxes by deducting your living expenses. So if you’re unfamiliar with accounting basics, a business accountant can help you start off on the right foot. Well, we’re here to tell you that hiring a business accountant is absolutely necessary for your small business—and well worth the cost. When it comes down to it, a business accountant can save your business thousands and make your life as a small business owner that much easier. Just like with hiring any employee, you must meet the person face to face to assess whether or not you think they’d be a good fit for your small business. While you’ll always want to hire an employee with the technical skills you’re searching for, finding someone you’ll enjoy working with is just as important.

How do I file my annual return?

She has been instrumental in tax product reviews and online tax calculators to help individuals make informed tax decisions. Her work has been featured in Yahoo Finance, Bankrate.com, SmartAsset, Black Enterprise, New Orleans Agenda, and more. Many tax preparers, especially given the pandemic can work with you remotely. Online reviews of tax preparers are https://www.bookstime.com/articles/part-time-accounting also available, but verifying the people who wrote them can be tricky. If you receive a recommendation for a CPA, ask the tax preparer for a few references and shop around before you make a decision. A Form 1040 return with limited credits is one that’s filed using IRS Form 1040 only (with the exception of the specific covered situations described below).

You don’t need to show documents when you file your tax return, but HMRC will ask for them if they ever audit you. For this reason, you should keep all documents and receipts organised. The self-employment tax page has more information on Social Security and Medicare taxes. Use the worksheet found in Form 1040-ES PDFto find out if you are required to pay estimated taxes quarterly. Self-employed individuals generally must pay self-employment (SE) tax as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves.

Leave a comment

Your email address will not be published. Required fields are marked *