Sacramento Tax Accountant + CPA for Self-Employed Business Owners
Cook CPA Group
People who have started their own businesses know that the freedom they have is valuable. They also know that figuring out how to manage all of their finances can be a burden. Understanding all of the aspects involved in the financial life of a business—bookkeeping, payroll, taxes, and more—can be overwhelming and ultimately distract a business owner from focusing on creating products and services for their customers.
Self-employed business owners in Sacramento can use the help of CPAs from Cook CPA Group to manage their finances so they can focus on what’s most important to them. Talk with one of the skilled accountants that work with Cook CPA Group today. Call (916) 259-8471 to learn more about how their services can help your business thrive.
Types of Tax Deductions for Self-Employed Business Owners
There are many different types of deductions that self-employed business owners can claim on their taxes. An accountant from Cook CPA Group can help self-employed business owners identify the deductions that they can claim on their taxes.
One of the biggest deductions that self-employed business owners can claim on their taxes is equipment. Anything that is used for the day-to-day operations of your business – including computers, cell phones, and office furniture – can be claimed as deductions. Home offices and all of the supplies included in them can be claimed as deductions as well. Self-employed business owners can also claim subscriptions to magazines or professional associations related to their business as deductions.
Self-employed business owners also frequently claim travel expenses (flights, gas, and meals) as tax deductions. Costs associated with education—such as books, classes, and conferences—may also be claimed. Interest paid on business loans taken out by self-employed business owners may also be claimed as a deduction on taxes. Self-employed business owners can only deduct up to 30 percent of the earnings from their businesses before interest, taxes, and depreciation.
It is also possible for self-employed business owners to deduct the cost of health insurance on their taxes. Certain stipulations apply: business owners may deduct what they paid in health insurance as long as the business made a profit, they are not combining multiple businesses to qualify, and they do not have any other health coverage.
How a CPA Can Help Self-Employed Business Owners in Sacramento
One of the most important taxes that self-employed business owners have to pay is the self-employment tax. Typical companies take this out of employees’ paychecks, but self-employed persons have to pay this tax themselves. Self-employed business owners must pay their own self-employment taxes, according to the Self-Employed Contributions Act (SECA). Self-employment taxes go toward Social Security and Medicare and must be paid quarterly in January, April, June, and September.
Self-employed business owners are taxed at a rate of 15.3% for their net income—12.4% for Social Security and 2.9% for Medicare. This rate of taxation applies to income that falls below $132,900. It is important to note that a business owner will have to pay self-employment taxes even if they are the only employee that works for their business.
There are consequences that self-employed business owners can face as a result of failing to pay their self-employment taxes. Firstly, they may be subject to penalties and interest. These will continue to accrue until the balance that is owed is paid. If self-employed business owners fail to pay their self-employment taxes, they may also be subject to backup withholding. This means that a tax agency will contact people and businesses that you have done business with and ask that they withhold portions of future payments from you.
Failing to pay self-employment taxes can also result in the seizure of assets. This only happens in severe cases. A tax lien can also be placed on your bank account.
A CPA from the Cook CPA Group can help self-employed business owners with other types of taxes, too. Our tax professionals can help self-employed business owners with the following taxes.
- Payroll taxes – Self-employed business owners will have to pay payroll taxes on their employees’ wages.
- Excise taxes – These are indirect taxes and are placed on businesses that sell certain types of products.
- Sales taxes – Sales taxes are imposed on businesses by individual states and are paid according to the goods and services that a business sells.
- Property taxes – Property taxes for self-employed business owners only apply if the business owns the commercial property on which they conduct their business.
Call Our Tax Accountant + CPA for Self-Employed Business Owners in Sacramento
The CPAs from Sacramento Cook CPA Group can use their experience to help self-employed business owners engage in healthy bookkeeping and pay their taxes. Get in touch with Cook CPA Group soon to learn more about how you can benefit from their professional services. Call (916) 259-8471 today to schedule a free consultation.