This information is from our chat with Jeannie “The Pole Digger” during her webinar November…
Please note, this article is about taxes in the United States (US). It may contain general useful information if you are outside of the US. Always refer to updated tax law in your jurisdiction and work with a certified tax professional.
Taxes can be complicated—especially if you are self-employed. Check out our detailed article about taxes at this link.
Ask yourself these questions as the end of the year is approaching to be more prepared for tax time.
Where did you work last year?
If you worked at multiple different companies, businesses, events, or other situations, you will likely get a variety of tax paperwork in the new year.
Businesses are required to report payments of $600 or more to contractors to the federal government by the end of January for the previous year and all employees (part or full time) will receive W2s from their employers.
Is your paperwork up to date at all these places? Did you move? Change your name? Contact these businesses now before they send out your paperwork!
Do you have a retirement account?
You don’t have to have a traditional day job to start a retirement account. Anyone can start a retirement account and should start one.
The money that you deposit into your retirement account can have tax benefits depending on how you set it up. Contribute the max amount that you can for the biggest benefit. Need help with this? IPIA members can work with our preferred financial advisor who works with people with non-traditional streams of income, including cash-based income.
Do you donate to charity?
Charitable donations are tax deductible!
Did you help a friend with their Go Fund Me? You can write that off.
Did you donate gently used clothes, shoes, or other items? You can write that off too!
Make sure you always get an itemized receipt.
Do you understand what you can deduct from your taxes?
Looking to “treat yourself” before the end of the year?
There are lots of things that you deduct as an independent contractor:
- Your “uniform costs” like clothes and shoes you only wear to teach or perform
- Educational expenses like workshops, books, and trainings
- Travel expenses related to workshops and trainings like your hotel room at PoleCon (IPIA members get a discount to attend PoleCon)
- Healthcare costs that keep your body moving like sports massage
- Memberships to trade associations like the IPIA (not a member? Join today)!
- And more!
Are you using the most efficient business structure for your business?
Have you set up an LLC for your business but now you’re making “too much” taxable profit?
Consider changing your business structure to improve your tax basis. Read about the different types of business structures you could use (in the US) at this link. Review your business situation regularly to understand if you should change your business structure. If you don’t have a structure, consider starting one to protect yourself from potential liabilities and improve your tax basis!
These are just a few important questions you should ask yourself to get prepared for tax time and to potentially minimize your tax bill. Tax planning is an important part of being a pole business owner whether you do your taxes yourself or work with a tax professional.