From time to time someone offers Freelance-Zone some valuable content that we feel will be helpful to our readers. Kevin Reeth is the CEO at Outright.com, a free online bookkeeping system that helps small businesses keep track of tax info and related material. (Read what PC Magazine has to say about this company here, or just check the company out at their website where there is plenty of information about things such as the security of data and how to get started.)
Since quarterly tax time is approaching, we thought you could use the information Reeth sent over and are printing it for you here. Thank you to Outright.com and Mr. Reeth for the timely information!
(Please note that the facts, thoughts and ideas expressed below are that of Outright.com and not of Freelance-Zone. We are not tax professionals–we’re freelance writers!)
5 Opportunities to Turn Tax Time to Your Favor
1. Get away with nothing. If self-employed, you are free from estimated tax payments if what you owe, after subtracting exemptions, deductions, and credits is less than $1,000.
2. A safe harbor during the economic storm. If you choose to pay the same amount as your total tax bill last year, simply pay the same amount on June 15, 2009 as you did June 15, 2008 OR 90% of what you will owe this year. You can feel confident in what you pay and send your check without further calculation and time spent concerning yourself with the details.
3. Pay it or stay it? We have had a rocky few months with the stock market. What are your thoughts on where it will go next? The IRS doesn’t pay interest on the money you give them now for taxes due later. Extend those tax expenses and put the money to work for you instead. Remember! You still owe the money so don’t take risks with it; just consider the tradeoff between what you could earn on it in a safe investment.
4. Credit have you tied up? The government penalty on underpaid estimated tax payments is down to 4%, the lowest rate we’ve seen in the last 10 years. Paying down those credit cards, with rates as climbing into the twenties, will likely save you more than the penalty due from underpaid estimated tax payment.
5. Organize for 2010. Work with outright.com to keep track of your estimated tax payments; saving the details for next year’s taxes and freeing your time for your business.