Your Accounting Firm in Miami On Self-Employed Tax Deductions
Who Are The Self-Employed?
According to the Pew Research Center 2015 statistics, 14.6 million people are self-employed in the U.S. which represents 10% of the nation’s 146 million workers. These self-employed workers hire about 29.4 million other workers, resulting in three in ten U.S. jobs being held by the self-employed in their employees. Your accounting firm in Miami found out men are nearly twice as likely to be self-employed, 12% vs. 7% and also more likely to hire other paid employees.
Self-employed men hire about 28% of the time compared to women who employ others about 16% of the time. According to 2014 data, 81% of those working in agriculture, forestry and fishing were self-employed or hired by someone that’s self-employed. 68% worked in construction. 35% in retail.
Medicare and Social Security
For the self-employed, decreasing costs and maximizing resources is key to their business’ success. For many, the first years are all about reinvesting profits into the business. So if you operate your own business know that your share is 15.30%.
Home Office Deduction
Whether you own your home or rent it, as long as you use a certain space exclusively for work then that space is part of your self-employed tax deductions. This includes a percentage of your mortgage interest, depreciation, property taxes, utilities, insurance and even maintenance.
Phone and Internet
Your accounting firm in Miami remind you that even if you don’t claim your home office deduction, internet and phone can still be part of your self-employed tax deductions. Make sure you deduct only the portion that used for business use. So if you’re using the internet half of the time to conduct business and the other half for personal use such as watching movies, then you should only claim 50%.
Health Insurance, Meals and Entertainment
When it comes to health care and self-employed tax deductions, you can claim it all including health, dental, long-term care and even premiums paid for a spouse or children. For meals, you can only deduct 50% of the cost of the meal. Just keep receipts and make sure they’re not extravagant dining experiences. The same goes for entertaining clients, 50% self-employed tax deduction. Remember, business actually has to take place in order to claim these deductions.
For the self-employed to be able to deduct travel expenses, the traveling must last longer than a day, you have to sleep or rest somewhere away from the general area of your home. If you need to travel to find new clients, learn a new skill or meet with existing customer, then you can claim your travel expense.
For more information on self-employed tax deductions, call your accounting firm in Miami at 305.868.7620 for help.