Self-employed: tax tips!
When you are self-employed, lately has not exactly been the easiest time to do business. Yet, especially during these times, it is crucial to keep your head above water. With these five tax tips for self-employed people, you can do business again in the coming period!
1. Keep track of your hours!
If you want to be seen as an entrepreneur for income tax purposes, you must invest at least 700 hours annually in your company. However, if you want to claim the deductible items for entrepreneurs, you often have to spend at least 1,225 hours on your company on an annual basis. Therefore, our tip is to keep track of all the minutes that you put into your business. So, in addition to the hours you work, the travel time and time you spend on administration are also important. The tax authorities inspect these hours carefully, so make sure you keep track of this!
Relaxation of the hour criterion. Due to the corona crisis, you may assume that you will invest at least 24 hours of your time per week in your company in the period from January 1, 2021, to July 1, 2021: even if this is not the case.
2. Invest optimally
As mentioned above: when you are seen as an entrepreneur for the income tax, you are eligible for certain deductibles. Among others, we know the investment deduction. So, are you planning to invest in your business? Plan these investments well in order to make optimal use of the deductible item!
3. Apply the small business scheme
Next to the deductible items, there are other benefits that you can experience when being self-employed. Are you a small entrepreneur who has made less than € 20,000 in turnover in a year? Then, apply the small business scheme (KOR). The KOR is a VAT exemption, which means that you no longer have to charge VAT to your customers, and you no longer have to file a VAT return.
4. Keep money aside
As a self-employed person, you are your own boss, which means you do not have an employer who automatically withholds wage tax: you have to pay the VAT and income tax yourself. Therefore, our tip: keep 21% of your turnover separate and estimate the expected profit twice a year, on which you base the income tax. By doing this, you won’t be shocked when you receive a letter from the tax authorities.
5. Averaging income!
As a result of the corona crisis, many self-employed people will have experienced a significant dent in their turnover. Do you also recognize yourself in this? Don’t forget to average your income! By dividing your income for three consecutive years, you can recover a part of this loss of turnover.
We are happy to help!
Are you self-employed and do you have questions regarding income tax or VAT? Or could you use our help with filing your taxes? We are happy to help! Please contact us using our details mentioned below.