If you’re self-employed, it’s common to struggle with finances, especially when quarterly taxes come due. Maybe you look at your bank account and wonder where that money is going to come from. You might even consider seeking a loan or borrowing money from friends or family. But what if you could reduce your financial difficulties by doing good works?
Donating directly to charity or even offering pro bono services are good ways for financially strapped individuals to both reduce their tax burden and give back to their community. If you’re considering this course of action, here’s what you need to know.
Know The Tax Schedule
Self-employment taxes are typically paid quarterly, based on estimated income. This can make it harder to balance your charitable deductions, but there are ways to make it work. Try to get a sense of your financial outlook and how much you need to reduce your tax burden by. Then, if you’re having a good quarter, donate a larger portion at that time.
Many self-employed individuals find it harder to afford their quarterly taxes later in the year, so try to make larger donations during the first half of the year. This will reduce your year-long tax burden while taking advantage of your current financial balance.