Top accountant Pauline Ho founder of Laus Consulting Services LLC in Orlando, FL, explains why self-employed individuals should plan for taxes year-round rather than waiting until April. For more information please visit https://lausconsult.com
-- For freelancers, contractors and small business owners, tax is not an event that happens once a year - and treating it that way is one of the most expensive habits Orlando CPA Pauline Ho sees among the self-employed.
For more information please visit https://lausconsult.com
Ho, founder of Laus Consulting Services, LLC in Orlando, said too many self-employed people treat tax as an April problem. By the time the return is due, she said, the year is over and most of the chances to change the outcome have already gone. “Tax planning is something you do throughout the year, not after it,” she said. “During the year you can still act. At filing time you can only report.”
The first area she raises with self-employed clients is estimated taxes. Anyone who expects to owe a meaningful amount and isn’t having tax withheld is generally required to pay the IRS in quarterly instalments across the year. Missing one of those deadlines or underpaying can trigger penalties even if the full balance is settled the following spring. “The IRS wants to be paid as you earn, not in one lump at the end,” Ho explained. “People forget that, and the penalty is entirely avoidable.”
She encourages clients to set money aside with every payment they receive, rather than scrambling for it each quarter. A practical habit, she said, is moving a fixed percentage of each deposit into a separate account the moment it lands, so the money is never mistaken for spendable income. For many sole traders, a quarter to a third of net earnings is a sensible starting point, though the right figure depends on the individual.
Planning through the year also means looking at deductions while there is still room to act on them. Ho pointed to retirement contributions as one of the most powerful and underused tools available to the self-employed, with account types that allow far higher contributions than a standard workplace plan — cutting taxable income while building long-term savings. Equipment purchases, home-office costs, mileage and health insurance premiums are others worth tracking as they happen, rather than reconstructing from memory when the return is due.
Good record-keeping underpins all of it. Ho recommends reconciling income and expenses monthly, keeping business and personal spending on separate cards, and holding on to receipts as they come in. “The deductions people lose are rarely the ones they didn’t qualify for,” she said. “They’re the ones they couldn’t prove.”
She added that regular check-ins through the year are also the way to catch bigger shifts before they turn into surprises a jump in income that pushes someone into a higher bracket, a change in business structure, or a strong year that warrants a larger estimated payment. Spotting those early leaves time to adjust.
“The clients who never seem stressed at filing time are the ones who did their thinking months earlier,” Ho concluded. “A couple of hours spread across the year, and regular sanity checks with a CPA, tend to pay for themselves many times over.”
Source: http://RecommendedExperts.biz
Contact Info:
Name: Pauline Ho
Email: Send Email
Organization: Laus Consulting Services LLC
Address: 879 Outer Rd B, Orlando, FL 32814
Phone: 407-401-9768
Website: https://lausconsult.com
Release ID: 89207702
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