What self-employed workers should know about tax deductions, contributing to an IRA and paying estimated taxes, from Lisa Greene-Lewis, TurboTax expert and CPA
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00:00 (upbeat music)
00:02 - A lot of entrepreneurs out there these days
00:05 and a lot of people working from home making money.
00:07 So what do they need to know come tax time?
00:09 More importantly, what do they need to know
00:10 before the end of the year to minimize their tax bill?
00:13 Lisa Green, Lewis TurboTax expert and CPA
00:16 is here with us right now.
00:17 He said, these guys have a whole ball,
00:19 you know, a whole new ball of wax to deal with.
00:21 In particular, they have to introduce themselves
00:24 to Schedule C.
00:25 So their income and expenses all go on Schedule C.
00:28 What do people need to know
00:30 about their expenses more importantly?
00:32 - Yeah, so before the end of the year,
00:37 first of all, make sure you're gathering
00:41 your receipts for your expenses
00:42 'cause you wanna maximize your deductions when you file.
00:47 But also, you know, if there's anything
00:51 that you have been looking at to buy for your business,
00:55 you wanna do that by December 31st.
00:57 And by doing that, you'll be able to deduct those expenses.
01:02 So for instance, if there's some equipment
01:04 you wanna buy for your business that will really help you,
01:08 you could purchase that by December 31st.
01:11 And every year they raise,
01:14 it's called the Section 179 deduction that you can get.
01:18 And it's up to 1,160,000 for businesses that you can deduct.
01:23 - That's an expense number.
01:26 That's a big number.
01:28 So start tallying your expenses.
01:30 Healthcare is always a line item on the Schedule C.
01:34 What do people need to know?
01:35 - Yeah, so unlike, you know,
01:40 individuals who have an employer,
01:43 they can, if you're self-employed,
01:46 you get a deduction for your insurance on your Schedule C.
01:51 So that's one thing to keep in mind, you know,
01:55 keep track of your insurance premiums.
01:57 When you work for an employer,
01:59 you can't deduct that unless you can itemize your deduction.
02:03 So that is a difference.
02:05 - Well, healthcare is really expensive these days.
02:07 So don't forget that line item.
02:09 So Lisa, what do people need to know about their SEP IRA?
02:12 - With your SEP IRA, if you're self-employed,
02:16 you can contribute up to 25% of your net income
02:22 or $66,000, whichever one is less.
02:25 - And finally, self-employed people
02:28 need to make estimated payments.
02:29 And there's one coming up, isn't there?
02:31 - Yes, so self-employed need to remember
02:37 by the end of the year,
02:38 there will be the fourth estimated payment due in January.
02:43 So you want to gather all your receipts for your expenses
02:46 so you can lower your income
02:48 and lower that estimated tax payment.
02:52 - Yeah, so get those done.
02:53 And finally, TurboTax can help with all this, can't it?
02:56 - Yes, TurboTax can help.
03:01 We have our industry-specific feature
03:06 that it identifies deductions
03:09 directly related to your industry.
03:12 There's so many different industries out there
03:15 and it gets smarter.
03:16 It uses machine learning and AI.
03:18 So as more industries are entered,
03:22 it gets smarter and uncovers deductions
03:25 that you never imagined that you could get.
03:28 And with TurboTax, you can also fully hand your taxes off
03:32 to our TurboTax Live full service tax experts.
03:36 And they can do your taxes in one meeting.
03:40 - That's good stuff.
03:41 Lisa Green-Lewis, TurboTax expert.
03:43 Thank you for being with us.
03:45 - Thank you for having me.
03:46 (upbeat music)
03:49 you