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Thursday, April 14, 2011

Taxes--Yeah, you still have to pay 'em!!!!

There are a lot of questions about self-employment and taxes. Working for vworker IS considered self-employment, but really, it's not that big of a deal. I am not an accountant or tax-specialist of any sort, but combined, my husband and I have ten years of experience being self-employed! For specific advice, please consult your tax advisor, but here are the basics.

You will be required to pay taxes on any money earned from vworker that is $600 or more. They will have you fill out a form to file with the IRS. My original accountant once told me to save one-third of my income for taxes. This is a great idea, if it is possible for you. That way, even if you don't have to pay in, you have a large chunk in savings.

KEEP TRACK OF YOUR EXPENSES!!!! This is the number one tip to all self-employed people. By claiming expenses, it reduces your total income, which mmeans you pay in less. The ideal tax situation is obviously one in which you owe nothing, or get money back. This does not always happen. But by tracking your expenses you can help yourself not to have to pay in as much.

When you work at home, you can claim 'business use of home'. So keep track of what you pay in utilities, water, heat, garbage removal, etc. If you buy a new computer, or you need a printer, claim it! We were able to claim our computer, printer cartridges, Internet connection and office chair. Ask me if you have any questions -- I won't make stuff up but if it's something I know the answer to, I'll be glad to help!

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