Title: Contractors and Tax Filing Tips - Red Box Tools

Many first time contractors are confused about taxes and how to go about filing taxes. All contractors should be up to date on tax filing tips that can help him or her save money -- as well as stay out of trouble with the Internal Revenue Service. 

Here are some tax filing tips for contractors:

• If you are a contractor, you can deduct up to 100 percent of medical insurance for yourself, spouse and your dependents. You can do this even if you do not itemize your taxes.

• You can deduct expenses for using your vehicle on the job. This includes expenses for insurance, repairs, cleaning, gas, oil, registration, etc.

• If your home was used regularly with your business, if clients met you at your home, if you store product or work related tools at your home or if you manage your business at your home you may be entitled to a tax break.

• You should take the “depreciation” deductions on your properties, equipment, vehicle, etc. each year. If you have not done this in the past, you may want to consider filing an amended return for the years you did not claim deprecation deductions on the property or products you used for your job. You might be able to recover all the monies in question.

• Use Schedule SE to find out what you owe for Social Security and Medicare taxes.

• Save all receipts that are business related. This can include travel, office supplies, telephone and internet access, equipment, tools, food, etc. All of these can be deducted on your Schedule C.

You should consider hiring a professional to do your taxes for you, at least the first few years of being a self-employed. Once you learn the ropes and tax filing tips you may be able to do your own taxes. 

Author: RedBox Tools, Inc.

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