Coordinating Your Business and Personal Taxes

Coordinating Your Business and Personal Taxes

Get Help Planning and Filing Both Your Business and Personal Taxes in Phoenix 

Sole proprietors and small business owners should coordinate their business tax filings and personal income tax filings to optimize their overall tax situation. Since the business income and expenses of a sole proprietorship are reported directly on the owner's personal income tax return, tax planning and coordination are crucial to minimizing tax liabilities and ensuring compliance with tax laws.

Business income from a sole proprietorship is subject to both income tax and self-employment tax. Coordinating your business and personal tax filings can help you identify opportunities to reduce your overall tax liability.
Many business owners are eligible for various deductions and credits that can lower their taxable income. Coordinating personal and business tax filings can help identify all available deductions and credits, ensuring that you don't miss out on any tax-saving opportunities.

The upsides of being your own boss tend to outweigh the downsides (other than some additional self-employment taxes). One of the handful of inconvenient challenges is saving for retirement. However, you do have some tax-advantaged options, including SEP IRAs, SIMPLE IRAs or Solo 401(k) plans. Coordinating your business and personal tax filings can help you maximize your retirement contributions and optimize your tax savings.

The Catch: Estimated Tax Payments

One thing a lot of gig workers, freelancers and new sole proprietors and small business owners don’t initialize realize when they embark on this journey are the required quarterly estimated tax payments. Failing to pay your estimated tax liability on the IRS’s timetable can result in steep penalties. Coordinating your business and personal tax liability throughout the year can help you accurately calculate and plan for these payments.


Proper recordkeeping is essential for accurately making those payments. Coordinating your tax filings can help you maintain accurate records and ensure you have the necessary documentation to justify your payments and your deductions and credits.

The Modern Gig Economy Isn’t All Fun and Games

If you’re a freelancer or gig worker, you’re essentially a small business owner since you’re faced with all the same burdens and requirements as other sole proprietors. While there are likely several compelling reasons you chose to go your own way, you still have to deal with a variety of regulatory and tax challenges the average W-2 worker doesn’t need to worry about.

Irregular income throughout the year doesn’t lessen your overall tax burden under normal circumstances, and it can make estimating your tax payments a little more complicated. This is especially treacherous given the potential penalties involved with failing to make accurate and timely payments, which can include interest and additional fees. 
There’s also the added cost of self-employment taxes (to cover Social Security and Medicare). Employees traditionally cover half of these costs, but as your own boss you’re expected to pay the entire amount yourself. 

In addition to self-employment and estimated taxes, freelancers and gig workers also need to stay on top of things like health insurance and retirement savings. You’ll be responsible for paying for both on your own, and failure to do so can have serious financial ramifications for you and your family. 

That being said, you might also be eligible for a host of potential deductions and credits that can drastically reduce your overall tax burden – if you’ve kept good records of expenses. 

While there are many DIY tax filing options available, many of these recordkeeping tasks will still fall on you – the sole proprietor. That’s where having an experienced tax preparer, bookkeeper and accountant in your corner can be a huge benefit. 

We can help you maintain accurate records of income and expenses is crucial for tax purposes. Doing so can help ensure you make full use of all eligible deductions and reduce your taxable income.

Record keeping is only half the battle. You also need to understand and properly claim all relevant tax deductions and credits, which can be extraordinarily complicated for the average freelancer or gig worker who is committed to their profession. 

We can help ensure your deductions for things like home office expenses, business travel and professional development are properly documented so you never run afoul of IRS or state tax laws. 

Our team also stays constantly apprised of all tax law changes to ensure our clients remain in compliance regardless of changes. We can make sure your strategy is updated as needed to legally minimize your tax liability every year. 

Get Help with Your Business and Personal Taxes 

Working with H&H Accounting Services can help freelancers and gig workers overcome the challenges they face at tax time. Our tax professionals and Certified Public Accountant (CPA) can provide expert guidance and help you navigate the complexities of self-employment taxes and deductions.


Call us at 480-561-5805 for a free one-hour discussion about your tax preparation and planning needs.


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