If you will continue earning income as an independent contractor in 2017, you may need to file quarterly estimated tax payments. See How Self-Employed Workers Can Save for Retirement to help calculate how much you can set aside in either plan. But you still have time to open and contribute to a SEP, which is similar to an IRA and offered by many brokerage firms, banks and mutual fund companies. It’s too late to open a solo 401(k) for 2016 (you needed to open the account by December 31 but have until April 18, 2017, to make contributions if you already have an account). Self-employed people can make tax-deductible contributions to a solo 401(k) or Simplified Employee Pension based on their self-employed income. See IRS Form 8829 Expenses for Business Use of Your Home for more information.
#IDEPENDENT CONTRACTOR EXPENSES FULL#
You’ll also be able to deduct the full cost of certain direct expenses for your home office, such as the cost of maintenance and repairs to that part of your home. For example, if your home office is one-fifth of the square footage of your home, you can deduct 20% of those expenses. Or you can use the regular method, which is based on your actual expenses, deducting a portion of your mortgage interest or rent, utilities, property taxes, homeowners insurance and other expenses based on the percentage of your home you use for your work.
If you qualify, you have two options for taking the deduction: You can use the simplified option, which lets you deduct $5 for every square foot in your home that qualifies for the deduction (up to a maximum write-off of $1,500). See the IRS’s home-office deduction factsheet and Publication 587 Business Use of Your Home for more information.
Independent contractors can deduct the cost of a home office if they use part of their home regularly and exclusively for a freelance business. Also see Most Overlooked Tax Breaks for the Self-Employed. See IRS Publication 535 Business Expenses for more information about tax-deductible business expenses.
0 kommentar(er)
