The Importance Of Professional Accountants

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Accountant Help For The Self-Employed Home-Based Worker

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The gig economy exploded in recent years, providing many people with a way to earn a living at home. Someone may leave a 9-5 career to appreciate greater freedom and more income by offering services via a computer at their residence. Whether teaching classes via videoconferencing, performing editing duties, or engaging in another professional pursuit, a new income frontier could be rewarding. Gig entrepreneurs should understand the obligations that come with their home-based venture. For one, they will need to pay taxes. Those who never filed a Schedule C based on self-employment income may need clarification over what they must pay and when. A business accountant may assist these entrepreneurs and do so long before the tax filing date arrives.

Taxes on Profits

A home-based business owner or gig worker must pay taxes on profits and not gross receipts. In other words, the computer may be deductible if the person must purchase a second computer for exclusive business use. The same could apply to any repairs to that computer. There are other deductions the person may take, which could reduce the tax burden. A business accountant could inform taxpayers of legal deductions they might not know are allowable. A thorough review of business expenses may reveal that the profit margin is lower than the entrepreneur realizes.

Avoiding Troubles

Sometimes, taking deductions leaves an inexperienced entrepreneur in tax trouble. The person may claim improper expenses and deductions, triggering an audit and all the hassles that go with the examination. Handing an accountant a list of expenses allows the professional to review what is legally deductible and what is not. Avoiding an audit and possible civil penalties may be in a self-employed person's best interests.

Meeting with the Accountant at an Early Stage

Many taxpayers only meet with an account when they plan to file their taxes. Meeting with an accountant far earlier may help an entrepreneur better prepare for the tax season. If the entrepreneur must make quarterly estimated tax payments, an accountant may advise them on the amount and inform them of the due date. The accountant could also inform them of how to take home office deductions and help them keep tabs on expenses. Perhaps the accountant could keep a file of receipts, collecting copies as the taxpayer receives them. Such receipts may help with filing an accurate return or addressing questions in an audit. Handling these things far earlier than the tax return's due date could make things less stressful.