Video: Tips to Help Self-Employed Save Money at Tax-Time
If you’re self-employed, you need to know about all of the tax deductions you can get, plus how retirement savings can help you lower your taxes, too.
Tracy Byrnes: With the gig economy everywhere these days, there's a ton of people self-employed. So it's really important to understand what should go in your tax return, and what shouldn't, quite frankly. Lisa Greene-Lewis, TurboTax expert and CPA, is here with us right now. So I think the first thing people have to realize when they become self-employed, is that Schedule C becomes their new best friend, isn't it?
Lisa Greene-Lewis: Yes, it is your best friend, and you can take a lot of deductions on there.
Tracy Byrnes: Right. And so some of the things to start to think about are the retirement contributions. Just because you're self-employed doesn't mean you shouldn't save for retirement. You have a self-employed IRA, or a SEP IRA, you can still make some contributions to that, can't you?
Lisa Greene-Lewis: Yeah, so for tax year 2022, you can still contribute to your SEP IRA, or make a 2022 contribution up to $61,000, or 25% of your income, whichever is less, and make an impact on that tax return. And for tax year 2023, it's up to $66,000, or 25% of your income.