Self employment has become quite popular over the last several years for a multitude of reasons. Some want to pursue a more meaningful path by earning through their passions while others want more flexibility to their work day and your reasons may differ even further. One thing all self employed individuals are going to need to deal with is accounting, in particular, as it relates to taxes.
Do You Need an Accountant?
You are not required to utilise an accountant or bookkeeping service, however, it is something you should carefully consider. If you are just starting out, you might be under the impression that you are not earning enough for an accountant. While this technically may be true, you could be leaving a lot of your hard earned money in the hands of the government if you do not. Accounting services will help you organise your expenses and ensure you are getting proper deductions for the office use of your home or mileage on your vehicle.
Tax Rules and Laws
Do you know which accounting method you should use? Are VATS a concern? Do you know what is new for the upcoming tax year? Have you obtained a UTR number yet? These are just a few of the many questions your bookkeeping professional can answer for you. Not only are they up to speed on the latest changes, they are familiar with all the forms that will need to be submitted at year’s end. Even if you absolutely love every single minute of your self employment, you still work hard for your money and should be able to keep more at the end of the year.
It Can Get Complicated Quickly
If you earn over a specific amount each year from goods or services, your bookkeeping can get complicated in a hurry. How long do you have to depreciate the new equipment you purchased for your work? Will you need to carry over expenses or money owed to you? Your client ordered a widget from you in one year, but did not settle the bill until the following year so when do you report it for tax purposes?
Self employment is liberating, exhilarating and may just be the hardest job you will ever love, but why complicate it further? Bookkeeping and accounting services can help you avoid the struggles and pitfalls of making your self employment successful. There are small firms that will not charge you an arm or a leg for assisting you in your financial endeavors. Give them a try and you might be surprised at just how economical it truly is.