There are many pros and cons to being  self-employed . You don't have a boss hanging over your shoulder and you do have a bit more control over when you will work. However, for many, you may also confront a larger than expected tax bill, like paying the employer portion of Social Security. Fortunately, there are is a lot of information available that the self-employed can use to lower their taxes. This article discusses three of the most valuable.

Tips the Self-Employed Can Use

1. Don't overlook deducting important business expenses. - There are many business expenses that the self-employed can deduct to lower their taxes. However, for them to pass muster, they must be related to your actual work. Here are a few sometimes overlooked expenses.

• Professional association dues
• Subscriptions to journals and periodicals
• Regulatory, licensing, and other government fees
• Costs associated with continuing education and training

Ofttimes, these are smaller business expenses. However, they can add up and equate to thousands of dollars in costs. Ultimately, no matter how small and seemingly insignificant, make sure you are taking advantage of them.

2. Exploit a health saving account. - It is not unusual for the self-employed to use a high deductible health insurance plan. However, while the premium is lower, out-of-pocket expenses can become an issue. The good news is that a health savings account (HSA) can reduce your tax bill. For example, if you are making $60,000 per year, and add $3,000 pre-tax to a HSA, your taxable income becomes $57,000.

The catch here is the funds are only for use with qualified health expenses. Nonetheless, there is a big upside. Money not spent will remain in your account, and you can invest and grow the amount you have available. Once you hit 65, the funds can be used for non-health-related expenses, almost like a retirement account.

3. Make use of other retirement plans. - As a self-employed person, you have in your tax reduction toolkit the traditional and Roth IRA, just like other workers. Each may allow you to stash up to $5,500 per year, or $6,500 if you are over 50. However, they both have some limitations.

Those who are self-employed should take a look at using a SIMPLE IRA, SEP-IRA, or individual 401(k), each which may have higher contribution limits for you. For example, the SIMPLE IRA allows adding up to $12,500 (or $15,500 for those over 50) plus an additional 3% of your earnings up to $265,000. A SEP-IRA account, for 2016, will permit additions of 25% of your earnings, up to $53,000 (or $59,000 for those over 50). Finally, an individual 401(k) permits $18,000 (or $24,000 over 50) plus 25% of earnings, up to the $53,000.

What haven't we covered yet that is important to you? If you would like more information on how the self-employed can use to lower taxes, or have any questions. please  contact us .