If you spent several years working for someone else before going into business for yourself, you’re probably used to a different sort of tax preparation than you are getting ready for now. Instead of having your taxes deducted from your paychecks, as a self-employed contractor in Ohio you are responsible for preparing and paying your own taxes. If you haven’t been putting money aside throughout the year, this can lead to an unpleasant surprise when it’s tax time. Fortunately, states Investopedia, there are numerous tax breaks you can take advantage of as a self-employed individual.
These tax deductions may include the following:
- Utilities used for your business, such as phone and Internet bills
- A portion of your home if you use an area exclusively for your work
- Business trip expenses, such as gas, food and lodging
- Car payments or insurance if you use your vehicle for work
- A portion of the interest on a business loan
- Education expenses for improving your work skills
It is important to note that you wouldn’t be able to claim the full amount of many of these expenses, but a certain percentage as outlined in your tax paperwork. However, any tax-deductible portion of your business costs can add up to favorable savings during tax time and help make this period more bearable. Understandably, you’ll want to be accurate when doing your taxes to avoid the possibility of an audit and tax litigation. This information should not substitute for the advice of a lawyer, but may help you to be more prepared as tax time draws near.