Gig abridgement workers aren’t accepted to see a above account from contempo GOP-backed tax ameliorate until aing year, but absolute contractors can still advice their account this tax division by actuality active about their business expenses.
The acceleration of companies like Uber and TaskRabbit has stoked a above amplification in the cardinal of Americans alive in the “gig economy,” which is accepted to abound from 3.9 actor workers at present to 7.7 actor by 2020, according to Intuit. Rather than archetypal employees, absolute contractors and freelancers are advised sole proprietors, or operators of a one-person baby business. They accept a 1099-MISC anatomy documenting their assets from the business that hires them, not a W-2.
Independent contractors should accumulate aing annal of their business costs throughout the year to aerate their answer back filing taxes in 2018, according to Lisa Lewis, a CPA and tax able for TurboTax. Costs accompanying to business supplies, computer equipment, business software, home appointment accessory and announcement are all deductible.
“One out of bristles bodies become self-employed every year and about one-third don’t abstract the business costs they deserve,” Lewis told FOX Business. “Make abiding you get the business deductions you deserve.”
Signed into law by President Donald Trump aftermost December, the GOP-backed tax ameliorate amalgamation bargain the accumulated tax amount to 21% from 35%. The amalgamation additionally agitated a account for absolute contractors, who, starting aing year, will be able to abstract 20% of their business-related assets afore advantageous a bargain alone tax rate.
In a academic case proposed by the Los Angeles Times, a distinct Uber disciplinarian who earns $40,000 per year and makes use of the 20% answer would save $960 in federal assets tax.
“The better change for tax year 2018 [taxes filed in 2019] for absolute contractors/freelancers is the 20% business answer on able business assets for self-employed, S-Corps, and partnerships,” Lewis said.
Some changes fabricated in the adapted tax cipher will administer to filings this year. The medical amount answer was bargain to 7.5% from 10%, and absolute contractors are additionally able to amount acreage they acquired and acclimated afterwards Sept. 27, 2017.
Aside from befitting a aing eye on business expenses, Lewis recommends that absolute contractors accumulate bright annal throughout the year to abbreviate their stress.
“Gather your business income, expenses, and deductible breadth in one abode so you accept it calm back you sit bottomward to file,” Lewis said.
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