The ability to reduce your taxes to Uncle Sam by writing off your expenses is one of the main reasons that people choose to go the ‘independent consulting’ path. You can write off meals, home-office, supplies, computers, fax machines, cell phone, gas, mileage, hotels, etc. etc.
If you are being forced to go through a W2 relationship, than you may be missing out on all these tax optimizations (unless you go with an Employer-of-Record that uses an Accountable Plan as their payroll method). Even if you are incorporated, you must be extremely diligent and self-disciplined to keep up with your business-related expenses (no one but yourself can do that!).
If you are using an Employer-or-Record model, it is extremely helpful that they keep you motivated to keep track of (and submit) your expenses weekly/monthly so that you can get as much tax benefit as possible. If you wait till the end of the year, than you are guessing as to your expenses…and quite often you will under-guess. Plus if you get audited, you will be scrambling to grab those receipts.
So, if you are feeling less than efficient with your tax preparation/expenses submittals, than consider going through an Employer-of-Record model. With your Employer-of-Record, you’ll be able to take advantage of their many, many services that are provided to you as well.
To request more advice about this topic or to see if you are efficiently writing off your business-related expenses, go to the top of this page (www.Rothwell-International.com) and click the button “Get Your Free Assessment” today!
Jill Freeman is a consultant’s consultant. For more information on this message or on the employer-of-record model, contact her at [email protected]