How can I, as a self-employed individual, minimize my tax burden?
February 27, 2023 | 40,00 EUR | answered by Lilli Reuter
Dear Tax Lawyer,
I am Luisa Weber, a self-employed entrepreneur, and I have a question regarding my tax burden. For the past few years, I have been self-employed and during this time, I have noticed that my tax burden has been steadily increasing. I am concerned that I will have to pay too much in taxes at the end of the year and I would like to know how I can minimize my tax burden in order to keep more of my income.
Currently, I am paying both income tax, trade tax, and sales tax, which adds up to a significant amount. I have already tried to optimize my expenses and claim all possible business expenses, but it seems like my tax burden keeps increasing.
I have heard that there are various ways for self-employed individuals to minimize their tax burden, such as investing in certain tax-advantaged areas or utilizing tax depreciation options. However, I am not well-versed in this area and do not know which options are best suited for me as a self-employed individual.
Therefore, I would like to seek your advice: What specific measures can I take as a self-employed individual to minimize my tax burden and keep more of my hard-earned money? Are there any special tax benefits that I have not yet taken advantage of? I would greatly appreciate your support and advice on this matter.
Thank you in advance for your help.
Best regards,
Luisa Weber
Dear Mrs. Weber,
Thank you for your inquiry regarding minimizing your tax burden as a self-employed businesswoman. It is understandable that you are concerned about having to pay more taxes and would like to keep more of your hard-earned money. Indeed, there are various ways for self-employed individuals to minimize their tax burden and optimize tax benefits.
First and foremost, it is important that you claim all possible business expenses to reduce your tax liability. This includes items such as office supplies, professional literature, training courses, travel expenses, telephone and internet costs, as well as insurance premiums. Depreciation on business purchases can also help reduce your tax burden.
Furthermore, you should explore whether you can benefit from tax depreciation opportunities. This means that you can spread out the tax deductions for purchases such as computers, office furniture, or vehicles over several years, thereby reducing your tax burden.
Investments in tax-advantaged areas can also help minimize your tax burden. This includes promoting environmentally-friendly measures, such as purchasing electric vehicles or using renewable energy sources. Investments in research and development can also receive tax incentives.
Additionally, you should consider whether you qualify for certain tax advantages as a self-employed individual, such as the small business exemption or cash-basis accounting. These regulations can lead to a significant reduction in your tax burden depending on the size of your business and revenue.
It is advisable to consult with an experienced tax advisor or tax attorney to analyze your individual tax situation and develop tailored solutions. An expert can show you exactly which tax options are best suited for you as a self-employed individual and how you can best benefit from tax advantages.
I hope this information helps you and gives you an initial overview of possible measures to minimize your tax burden. If you have any further questions or need assistance, please do not hesitate to contact me.
Sincerely,
Lilli Reuter
Tax Lawyer
