Doing taxes as a self employed professional is already a real pain. Gathering 1099s, looking over records, worrying. Is claiming expenses worth the time and trouble?
Working from home as a self employed professional means being entitled to certain expenses on yearly income taxes. When the home is also the office space, those who work from home might be able to claim expenses on their rent or mortgage payments, utility bills, even mileage on their personal vehicle. While that all sounds great, the reality of taxes and claiming expenses is often a nightmare…especially for all the people out there who aren’t so great with math.
Most self employed professionals don’t make their living with their math skills, and that’s one of the main attractions of working from home. But every Spring, everyone has to focus on one thing: not getting in trouble with Uncle Sam. Doing taxes is already a nightmare even when W-2 forms make it easy. Throw 1099s, expenses, utility bills, and receipts into the mix, and claiming expenses starts to become more pain than pleasure.
The truth is, self-employed professionals are rarely entitled to huge returns on their income taxes. Why? Because, as those who work from home already know, income taxes aren’t taken out of the money received for services. This means it’s the self employed professional’s responsibility to claim income, expenses, or insanity (when all the paperwork just gets to be too much). It is already difficult to claim self employment income, figure out self employment taxes (yes, sometimes there are extra self employment taxes, as if working from home isn’t hard enough already!), and make sure that all paperwork is in its proper place. Claiming expenses of any kind is always extremely detail-oriented, time-consuming, and sometimes a real pain in the…calculator.
Being a self employed professional means being an entrepreneur of sorts, and that means being all alone when it comes time to file and claim. The only time that claiming expenses is a good idea is when the self employed professional has earned several thousand dollars through work from home efforts. Unless the self employed professional knows how to do their own taxes or has someone to do them cheaply, hiring a company or individual to carefully comb through receipts and take the time to claim expenses is going to be a very costly affair. Unless a goodly income has been earned through work from home efforts, claming expenses just isn’t worth the time and effort it takes to get all the proverbial paper ducks lined up in a row. Look for money-saving tips that will help anyone get through tax time (and hopefully have more income when it rolls around) at Personal Budgeting.
