Another great reminder for those of us who practice real estate. Remember, you have got to "Give unto Ceasar what is due unto him." The consequence for falling short of this can be severe. Thanks to the Marcus Rice's Team for providing us this reminder
Financial Mistakes to Avoid If You're Self-Employed While Trying to Buy a House
It seems there are more and more people becoming self employed these days or at the very least, many folks are starting a side business, turning a hobby into some extra income or doing some type of independent contractor work. Whether you've decided to turn your blog into a business, sell a multi-level marketing product, or rent a storefront to start selling your homemade jewelry, there are some mistakes you will definitely want to avoid.
Not Setting Aside Money for Taxes
This seems simple enough, but is probably one of the biggest tax mistakes people make. The number of people that haven't set aside money for taxes is pretty high. If you are a 1099 contractor, the company you are contracted with does not pull out taxes for you.
At first, this feels great because your paycheck is higher then reality sets in when it's time to file your taxes. Uncle Sam requires you to make quarterly estimated tax payments. If you don't have enough paid in for your estimated taxes you could face some penalties.
Another thing people fail to realize is the self-employment tax that's due. Uncle Sam charges 15.3% tax for self-employed individuals in addition to your regular income tax. This is equivalent to the FICA tax on a regular paycheck. The good news is that you can deduct half of your self-employment tax, but you still have to pay.
Not Keeping Track of Income and Expenses
This is one of those mundane tasks that most owners hate, but every business must do in order to maximize deductions as well as protect themselves from an IRS audit. A business owner should be organized when it comes to keeping track of income and expenses. Don't write down your mileage on a napkin each time you travel. Get a notebook, use a spreadsheet or some budgeting or personal finance software to track the amount of your expenses, the category (i.e. office supplies) and a brief explanation of what you purchased etc.
Don't rely on your memory to come through for you when you need to report an expense. Keep your receipts, develop a system and keep up-to-date.
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The Marcus & Tonya Rice Team specializes in Richmond, Va, Henrico County, Chesterfield County, Powhatan County, Hanover County, Petersburg, Colonial Heights, and Fort Lee Homes and Real Estate for sale. We are tech savy realtors with over 11 years experience. Please join us on our Social Networking Network to stay up to date on Richmond Virgina real estate news and more...
The Marcus Rice Team can be reached at 804-247-8187 or remaxrice@live.com
The Marcus Rice Team
RE/MAX Allegiance
13204 Hull Street Rd.
Midlothian, VA 23112Call Marcus at 804-247-8187
Office 804-419-1420www.richmondvahome.com
email: remaxrice@live.com
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Marcus Rice
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The many challenges of being self-employed. I think we should have special exemptions so we quailify. Of course it's not such a bad thing to put a large downpayment down either.
Very worthy reblog!!
Everyone buying a house needs to pay attention to these simple rules to make their lives and their purchase so much better