Full-time Employment/Part-time Self-employment
Hello. I have a full time job and I supplement my income by throwing a newspaper route. The newspaper issues me a 1099 every year. For some reason, for 2017 my calculated self-employment tax is more than the amount of my pay increase for adding a second route. My gross earnings for 2017 was $14,270; a difference of ~ $3,175 from 2016 but calculation from the software claims I owe over $4K. How can I cut my self-employment tax down? thank you.
The best way to decrease your self employment taxes is to make sure you are deducting all expenses and taking all business tax credits that you qualify for. I’ve written a couple of articles that will give you some insight into business expenses and tax credits that you may not be aware of.
Also, I recommend that you try and make quarterly estimated tax payments. If you don’t estimate your taxes and pay them each quarter, you could be looking at a tax penalty when you file your tax return in April.
Please find the links below to the articles I mentioned and I also recommend that you check out QuickBooks Self Employed. It is a great accounting software for self employed individuals like yourself. You can track all of your income and expenses and it will automatically calculate your estimated taxes and allow you to submit your payments electronically.
Link to Self Employment Taxes:https://fitsmallbusiness.com/self-employment-tax-rates/
Link to Best Business Saving Tax Tips:https://fitsmallbusiness.com/business-tax-saving-tips/
Link to QuickBooks Self Employed:https://fitsmallbusiness.com/quickbooks-self-employed/
Best of luck,
Crystalynn Shelton, CPA