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However, they also take on the added responsibilities and costs of handling their own taxes.
Here are sixyear-end tax moves to consider.
These documents can help estimate the years business earnings for tax planning purposes.
Plus, theyre useful for identifying potential deductible expenses, which might require preparing further documentation like mileage logs.
According toTaxAct, billing customers later may be an option, but holding off on cashing received checks isnt.
Another way to defer income is to make strategic pre-tax retirement contributions.
Side hustlers may also qualify for apersonal tax creditfor these contributions.
However, side hustlers must review theIRS deduction rulesthat vary based on the expense category.
Plus, its best to avoid making nonessential purchases to save a little on taxes.
The IRS offersForm 1040-ESto calculate estimated federal tax payment amounts based on expected self-employment earnings.
The deadline for the final quarterly payment for 2024 is Jan. 15, 2025.
Like with a sole proprietorship, personal income taxes would apply to profits.
Plus, this structure offerspersonal liability protection.
Drawbacks include more complexity and the requirement to file both personal and S corporation returns.
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