Opinions expressed by Entrepreneur contributors are their own.
If you've already set up a Keogh retirement plan, be sure tomake a contribution before April 15 for the 2001 tax year. For2001, the self-employed can contribute up to 25 percent of theircompensation and deduct it from current taxable income.
But if you don't have a Keogh plan, consider a SEP-IRA."SEPs are one of the most common types of retirement plansused by self-employed people because of the ease of administrationand high contribution limits," says Paul Gada, a tax analystwith CCH Business Owner's Toolkit, a division of Riverwoods,Illinois, tax and business law information provider CCH Inc. For2001, the contribution limits for a self-employed person are about13 percent of his or her net earnings.
You can also reduce income for 2001 up to $3,000 by claiming netcapital losses on investments that took a hit in 2001. Losses over$3,000 can be carried forward to 2002, says Gada.
Can't pay all the taxes you owe? The IRS recommends filingon time and paying as much as you can. Also consider an installmentplan. Go to the IRS Web site (www.irs.gov) to find out whetheryou're eligible for an installment agreement.
Finally, check with your accountant to make sure you'vetaken all the deductions and credits for which you qualify.
Great Falls, Virginia, writer Joan Szabo has reported on taxissues for more than 15 years.
Contact Source
- CCH Business Owner's Toolkit
(847) 267-2743, www.toolkit.cch.com
