Switching from a job at a factory to a sole proprietorship will affect the manner in which you file your taxes. You may even be in an entirely different tax bracket, which results in you receiving a tax bill. Before you get settled in your new career, decide how you will keep up with your earnings, and pay self-employment taxes that you are liable with.
Seek Tax Preparation Services
If you have some experience with filing taxes and use a software program to aid in filling out the forms necessary for filing purposes, you may be able to continue with this method but you should seek some advice first. A tax preparation service employs accountants, who can aid in preparing taxes for individuals and business owners of small and large enterprises. Making an error on a tax return can be costly. An accountant will explain the tax rules, regarding the filing of business taxes as a sole proprietor.
You can choose to pay quarterly taxes, which would break your tax liability down into installments or you can keep track of your annual earnings and pay the required amount that you owe when you file your taxes at the beginning of the year. Itemizing your tax return is something to consider if you are going to be spending a lot of money upfront to operate your business, or if you will have recurring expenses which relate to your business.
For instance, if your sole proprietorship is one in which you sell custom goods and provide a delivery or shipment service, you may be able to receive a credit for the amount of fuel you use, the shipping costs that you incur, and the packaging materials that you purchase. An accountant can advise you on whether or not you will be better off using a short or long-form filing method.
Use Some Financial Strategies
After meeting with an accountant, you will be better equipped to transition into your new job as a business owner and may have made a decision about whether you would like to file your taxes yourself or have an accountant aid you.
With a complicated return, which includes many deductions that you are seeking, you may be better off hiring an accountant, since this person will accurately file your taxes and see to it that you receive credits for each item that you qualify for. If you have questions about tax preparation, reach out to a local accountant for more information about how their services can benefit you.
If you're a business owner and you don't have an accountant, you might want to consider hiring one. Accountants help business owners by handling the books, filing tax forms and managing the costs of the business. They also offer guidance to concerning important business matters. We aren't accountants, but we do have an understanding of the importance of their duties.
We've interviewed accounting professionals and they've answered all our questions about their job description and explained how their services can benefit business owners. We've compiled all this information into articles that we've posted on this site. We hope that you will read them to learn how an accountant can benefit your business.