Today TaxMama® hears from Idlkotr in the TaxQuips Forum, with a good question. “I have the opportunity to be an independent contractor. I am an occupational therapist who will be working with disabled children in their home. Thus, a lot of driving. I will be doubling my income. I do not have a clue how to be an independent contractor and not go to jail for income tax fraud.”
Congratulations. That sounds like a wonderful opportunity.
In the TaxQuips Forum you will find more detail. For this brief TaxQuip, I have outlined my reply:
Make sure you have business licenses for all the towns where you will be working.
Meanwhile, read IRS Publication 334 thoroughly. It’s a free tax guide for small businesses.
Get a bookkeeping program, to track your income and expenses – especially the out of pocket, cash expenses. It wouldn’t hurt to get a scanner, for your receipts.
Track your business AND personal mileage. I think FreshBooks and Outright contain a mileage tracker in addition to the bookkeeping element.
Now, you have the ways to track things. If you want to know how to minimize your taxes, too, read Small Business Taxes Made Easy. It will include information the IRS will never tell you.
One last thing. If you’re driving a lot, get a AAA membership. If you have any problems, just give them a call and they’ll get you home.
And remember, you can find answers to all kinds of questions about running a business and other tax and business issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
Please post all Comments and Replies in the new TaxQuips Forum .
6 thoughts on “Doubling My Income”
This is Steve, sorry if I broke any rules here. I am the developer of TrackMyDrive and thought it went well with your discussion. There are no viruses in the system, and have been doing this for a couple of years and we are in good standing with Apple and Google with all of our apps. I would be happy to answer any questions, just shoot me an email.
Note folks: Normally, I would flat-out delete a post like Steve’s – marketing his product without permission. But…I’ll leave it here for now. If you decide to try it – try it at your own risk. I don’t know who this fellow is, whether or not there are viruses in his system, or how well it does the promised job.
If you try it, please let me know what you think.
I love to know about new tools that actually work.
Don’t forgot to use Trackmydrive.com (with your smartphone) for your mileage tracking. It uses GPS in your phone to track your tax deduction automatically.
All very good advice.
As a mom of a child with CP and a former CFO of a home health agency, I’ll add:
Track purchases of all the small toys did you buy your kids to play with
Consider your home office deduction
Don’t forget your cell phone expense!
Laptops can be written off if using to chart
My child’s therapist has an iPad for therapy
Any apps you buy for the kids can be written off
Keep copy of oil change receipts to document mileage on you vehicle from a third-party
Continuing education is a deduction
Remember if you deduct premiums for disability now, pay outs from the policy are then taxable
But mostly thanks… It’s people like you giving kids like mine a fighting chance.
Also, disability insurance is a must! Get own occupation and as much as you can afford. It is much more likely to be disabled than die and disability is one of those thing that will send an independent contractor into a financial tailspin.
Also, malpractice is essential. Look to an association of therapists for a discounted rate.
Hope this helps.
Don’t forget to buy yourself health insurance!!!