7 Advanced Tax Strategies for the Self-Employed

Lastly, make your new accountant feel at home and introduce them to the people they will be working with. With an understanding of exactly what you’re looking for in an accountant, you can begin drafting a job posting to attract the accountant of your dreams. In addition, you’ll also want to prepare a collection of interview questions that can help you vet potential hires. Now that you know what a business accountant does, you may wonder how to find one for your small business. Whether you’d prefer to advertise a job opening or seek out an accountant on your own, read through these steps to find out how to hire an accountant for your business. Unless you’re an ex-accountant turned small business owner, you’ve likely wondered if hiring an accountant is the right move for you and your business.

• It is backed by Liberty Tax and provides features such as audit protection and tax break checks.
• Part of your accountant’s job is keeping up with tax law changes and leveraging them to save you money.
• If you eventually expand your business to include a bookkeeper or business partner, Wave is just as free for four users as it is for one.
• If you need help finding the right structure, contact a tax professional, check your state’s website, or use online resources.
• But no matter what type of business you own, the following should always be taken into consideration when looking for accounting software, or any software application for your business.
• Instead, read all about the best accounting software for small businesses.

Xero also contains budgeting capability so you can create an organizational budget as well as a departmental budget or project budget if needed. There is also an option to import budget details from another application if necessary. One feature that sets AccountingSuite apart is its budgeting capability, which allows you to create a current or future year budget with the ability to choose the accounts you wish to include.

H&R Block Self-Employed Online

If you have more complicated tax needs, such as running a small business, ask the tax preparer if he/she can provide tax assistance throughout the year and how much it would cost. Consult with other people in your industry if you are self-employed or own a small business or seek advice from members of a professional organization. Getting referrals from your co-workers, friends or family members is another option, but they likely are facing a different tax or financial situation from you. A good tax preparer can ensure you receive all the credits you qualify for and can help you avoid filing an extension or amendment, or paying penalties and interest.

• You can export reports in a CSV format available for customizing if desired.
• FreeTaxUSA is a tax preparation software that allows small business owners to prepare and e-file their federal and state taxes.
• Zoho Books’ free plan—which is an option for freelancers and other sole proprietors who make less than $50,000 USD in annual revenue—includes automated recurring invoicing, expenses, and payment reminders.
• Intuit QuickBooks Self-Employed ($15 per month) is a good choice for a self-employed individual or freelancer who needs to separate business and personal expenses, send invoices, and track mileage.
• You can subtract the full $22,000 from your taxable income if you itemize your deductions.
• For an additional $11 per month, you’ll have unlimited access to a CPA to answer tax questions throughout the year.

On the other hand, a bookkeeper focuses more on keeping track of daily transactions and posting journal entries into accounting software. As you can see, business accountants can provide value for you and your business all year round and are not only needed for small business tax prep. If any of these services sound like something you’d like to have for your business, you might consider hiring one. Each of our subscription plans includes access to online help articles and customer support, when needed.

Why should you consider self-employed accounting software?

QuickBooks also automatically syncs all bank and credit card transactions for seamless tracking of income and expenses. If you sell handmade products on Etsy or plumbing supplies out of your home, try Xero. It’s one of the only accounting software providers to offer inventory tracking with each plan. Xero also helps sales-based businesses stay afloat with features like customized purchase orders for fast, clear communication with suppliers. Its automated sales tax calculations streamline end-of-year tax reports, and its 24/7 live customer support means you won’t be left hanging if you’re hit with a tech problem mid-invoice.

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• For example, QuickBooks Online’s dashboard is simple, straightforward, and easy to navigate.
• It might also appeal to small businesses that need double-entry accounting but not time tracking, robust reports, or full mobile access.
• Now that you know what a business accountant does, you may wonder how to find one for your small business.
• And unlike FreshBooks and Xero, Wave doesn’t limit your invoices, bill payments, or customers.

Reporting options are good, and there is a wide selection of standard reports, although they offer limited customization capabilities. If customization is required, you can export any report as a CSV file if desired. AccountingSuite also includes good reporting options, with reports easily customizable to better suit your needs. Zoho Books includes good reporting options with a variety of standard reports available, and all reports are able to be exported using a CSV format or Microsoft Excel. One of the biggest benefits of using FreshBooks is that it has the features self-employed individuals need without a lot of unnecessary fluff.

Do any recent changes in tax law affect my business?

Tracking the money that flows in and out of your small business is an essential piece to ensuring that you not only stay afloat, but also continue to grow successfully. An enrolled agent (EA) is a tax preparer who must pass a three-part series of tests called the Special Enrollment Examination that covers individual and business tax accountant for self employed laws and representation issues. They have deep knowledge of tax issues and are enrolled to represent taxpayers before the IRS in the event of an audit. People who own businesses typically work with a CPA throughout the year on charitable planning issues, calculations of quarterly estimates and sometimes tax notices, Dula says.

Sit for the CPA exam, if you want to earn the Certified Public Accountant designation. The American Institute of CPAs notes that CPAs are trusted business advisors, and this designation can help you land clients for your business. Use the National Association of State Boards of Accountancy website to get the application and fee information for your state. Having a member of your team who handles everything financial might seem tempting, but remember to factor in the salary and benefits you would be responsible for providing. Your two main choices will likely be an accounting firm or an independent accountant who you contract with. Small business accounting mirrors this definition, but usually pays special attention to even the smallest details, since for most small businesses, every dollar counts and needs to be noted.

Time Tracking

The Early plan is $9/month for the first two months and then jumps to $18/month. It includes up to 20 invoices and five bills, along with bank reconciliation capability. If you need to send more than 20 invoices or process more than five bills, you’ll need to look at the Growing plan, which is $30/month for the first two months and then goes to $60/month. Xero offers a wide range of features, including complete custom invoicing, expense and inventory management, and bill payment options, along with a multi-currency option.

If you are all about the miles and don’t need a heavyweight accounting service, you should definitely check out QuickBooks Self-Employed’s mobile app, which automatically logs your miles as you drive. You can also just enter records manually for your business-related trips on this site and others, and the application will calculate your mileage-related tax deduction. FreshBooks offers this automated tracking feature on its iOS app, too. QuickBooks Self-Employed is best suited for freelancers, solopreneurs and consultants who want an easy-to-use online accounting tool to keep track of their business’s finances. If you have more clients, you can opt for the Plus plan, which is $22.50/month. Both offer unlimited expense tracking and invoicing and include a mobile app for Android and iOS devices.

Get your books in great shape.

Jackson Hewitt also provides in-person tax filing services with flexible hours and locations, and a range of guarantees, including a Maximum Refund Guarantee and a Lifetime Accuracy Guarantee. Users also have access to a tax professional with self-employed expertise for more complex tax questions and audit defense for three years. TaxSlayer has been in operation for over 50 years and has a 4.4 out of 5 rating on Trustpilot. To help you choose the best self-employed tax software program for your business, we’ve compiled a list of some of the top options available. These programs stand out for their user-friendly interfaces, comprehensive features, and affordability.