Return To Blog

Filing Your Denver Tax Return If You’re Self-Employed

June 15, 2016

If you haven’t yet filed your tax return, it’s not too late to do so. Filing your tax return can seem daunting if you’re self-employed, particularly if you’re trying to figure out what you can write off, and if you can claim any other credits. If you had a company job where taxes were automatically deducted, plus you worked from home and received a 1099, things can be even more confusing. Luckily, you can consult a Denver tax specialist if you feel too overwhelmed. Here are some tips for filing taxes if you’re self-employed - even if you go to a professional accountant, you can make sure you have this information with you for your appointment to make things go more smoothly.
  • W-2s and 1099s: This may seem obvious, but it is important to make sure that you attach all of your relevant documents to your tax return. The IRS won’t take your word for what you did and did not pay, and if you don’t attach all the documents for the income and taxes paid that you claim, they will send your return back or put it on hold until they receive these documents.
    • Each document needs to be attached to the form you are submitting. Whether you have six 1099s or one, three W-2s or none, make sure you attach each one to your tax form with the correct tax form(s).
  • Taxes Paid vs. Taxes Owed: If you had a W-2 where taxes were automatically deducted, you may not owe any taxes even if you were self-employed and are subject to self-employment tax.
    • When filling out your 1040, make sure that you include your 1099 income, and calculate the amount of total tax you paid through your W-2 to figure out if you will get a refund or not.
    • Even if you are still due a refund, make sure you fill out the correct form for self-employment tax and attach it to your 1040. If you skip this step, the IRS will place your refund on hold and send you a letter requesting the supporting document.
  • Possible Deductions: You can write off different things that are relevant to your self-employment. The type of work you do as an independent contractor determines what costs you can and cannot write off.
    • If you work from home primarily on your computer, you can write off the cost of a new computer, the cost of any required software for your job, and the cost of your antivirus software. Consult your accountant to see if you can write off other costs, such as computer repairs, if you had any.
    • If you do a lot of traveling for your independent contractor position, you can write off the cost of gas, airline travel if relevant to your work, hotel costs if they were work-related, and other travel expenses.
    • If you are a travel writer/blogger, where you rely on your laptop as well as need to travel, a professional will be able to determine how much of your costs you can write off.
    • TIP: Be careful of writing off too many things if you make a lot of money working from home, because it can increase your chances of an audit, particularly if you file your own taxes. Read our blog post 4 Things to Know about IRS Audits and Your Denver Tax Return for more information on tax auditing.
  • Claiming Other Credits: There are plenty of credits out there that you may be able to claim that may make your amount of taxes owed smaller. This would be especially useful if your only income is from independent contracting or other self-employment. Make sure if you are filing your own taxes that you are certain you are not breaking any rules when claiming credits. Carefully read the IRS instruction sheets for each credit as well as the instructions for filling out the appropriate tax form, like the 1040.
    • Education Credits - There are several education credits available to full-time students. There are significant differences between them all, so make sure you choose the correct one, or the one that is most likely to get you a sizable deduction provided you meet the criteria for more than one. For example, one is dedicated to student loan interest, while others are based on cost of tuition. If financial aid is covering your school costs, make sure you read the fine print to see if you can claim the credit based on student loans vs. out of pocket costs.
    • Earned Income Credit - The EIC is based on your total income. There is some extra math involved to figure out if you can claim this credit to get a deduction. Make sure you do the math correctly and come to an accurate deduction amount, because errors that the IRS has to fix will delay your refund.
TIP: Save all the receipts for what you think may be relevant write-offs, even if you are unsure.

If all of this information is making your head spin, contact us at Bloch, Rothman & Associates. We employ some of the top professional accountants in the area, all of which are certified experts in the field. We want to help you get a great refund, or at the least, make sure you’re not overpaying the IRS if you still owe some taxes at the end of the day. Call us at 303-321-7160 to see what we can do for you, and we’ll schedule you for an appointment at a time that works for you.