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Once upon a time and not too long ago bad financial management use to

only mean bad credit. Now not managing your finances can cause many

issues including loss of employment, bankruptcy, foreclosure, and even

jail! More specifically we’ve seen many celebrities fall victim to

jail time for not paying their taxes. Ron Isley from the legendary R&B

group the Isley Brothers spent 3 years in prison while Wesley Snipes

has just begun his bid. Other celebrities in tax trouble include Lil

Wayne, Snoop Dogg, Doug E. Fresh, Wyclef, Toni Braxton, Ruben

Studdard and the list goes on. The main reason we are seeing more

people fall into tax troubles is because new technology has made it

easier for those who are self-employed to take their business matters

into their own hands. While managing your own business matters may cut

cost in the short run if you are not well versed it may cost you more

than just money. Whether you work 9-5 and have a side hustle or you

are a full-blown entrepreneur the following are tips that every

self-employed persona needs in order to keep themselves out of trouble

with our dear old Uncle Sam.

1. Keep very good records: Most large companies rarely ever have

issues with taxes because they hire accountants and financial officers

to oversea most of their spending. Because you are a one-stop shop it

is important that you keep good records and save all receipts so that

you can support your deductions.

2. Use your deductions wisely: Again make sure that you are keeping

your receipts for everything! Obviously you should deduct anything

that

is used to conduct your business such as business travel, office

supplies, postage and shipping costs, dues, subscriptions, and

anything else business-related. Don’t forget your office space;

whether you have a separate office or use space in your home you are

able to deduct either the rent you pay for your office space or a

percentage of your rent or mortgage from your home relative to what

you use for your business. You are also able to deduct child-care,

phone bills, and utilities.

3. Defer income if necessary: Being self-employed gives you the

flexibility as to how or when you pay yourself. If you notice that you

are beginning to reach a higher tax bracket it is wise to hold off on

paying yourself or adding income to your books.

4. Increase expenses if necessary: Just as you can choose to defer

income, if you see that your income is high, you can make many more

year-end business purchases to increase your deductions.

5. Get the right help: Not all tax experts are created equally. Make

sure you ask for help from someone who has experience working with

self-employed taxes!

6. File on time: The worst thing you can do is not report your taxes.

Make sure you are filing your taxes on time and if for whatever

reasons if you need more time to file make sure you file an extension