The administration's handbook on self-employment tax. That's because federal and state tax regulations are constantly changing, and why the first recommendation from tax experts is usually 'grab an accountant or tax preparer' to help with filing the paperwork. Yet, experts say that many small business owners and self-employed ignore tax planning and don't even think about reporting to the taxman until time is short. The second edition includes coverage of the major changes brought about by the Taxpayer Relief Act of 1997, which included several benefits to the self-employed. One of the biggest mistakes most independent contractors make with tax filings, says Fishman, is not taking all the deductions they're entitled to.
Many contractors overlook valuable deductions, such as the home office deduction.
Check out the tax change. The home office deduction certainly deserves the attention of contractors this year, because the government expanded qualifying criteria as of 1999. Up until last year, the home office deduction was strictly applicable to those who worked in the home and used their home offices for the majority of their job-related responsibilities. As of last year, however, the deduction became much more accessible, specifically to self-employed contractors who may use part of their home for administration and paperwork purposes. And while the deduction is now open to a wider tax-paying audience, there are still some serious caveats to consider, say experts.