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2018 Tax Update for The Self Employed | A Brief Digestible Summary of the New Tax Laws

838 ratings | 27963 views
Did you know that as of January 1st 2018, there were some new tax laws that took effect that will change the outcome of your Self-employment taxes and business deductions? Well... if you did or if you didn't, in this short video I'm going to briefly explain what changes took effect and how its going to impact you and your self-employment taxes. Please understand, however, that there were a ton of changes and whats covered in this video only pertains to a small part of the personal and business changes. And because this law is so new... somethings are subject to be amended. I ask for your forgiveness in advance, as like everyone in the field of taxation, I'm still trying to wrap my mind around it all so if there were any parts that were not clear - I apologize. For more information on the Self-Employed Tax Academy click here: https://www.selfemployedtaxacademy.com
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Text Comments (187)
ac05 (1 day ago)
Are you a CPA? Or do you have any recommendations for one?
ac05 (1 day ago)
I live in Atlanta, GA
I am not a CPA, however I do know a bunch... what area are you in? Or you could do a quick google search. After watching this video you should know enough to ask some great questions to make sure that they are a good match for you.
Kandice-N-TheMiddle (14 days ago)
On the example where you had a person with 2 dependents filing HOH for the previous (2017) year you said their taxable income would be $23,500 and their liability $2,857 this would put them in a 12% bracket that did not exist. Wouldn't their liability be $3525 which is 15%? I did not check math on all other but this one tuck out to me to check. I am curious to go through them all but i might not. I would just like clarification, please.
Kandice-N-TheMiddle (14 days ago)
And this was a very helpful video
Kandice-N-TheMiddle (14 days ago)
Okay thank you for your speedy reply!
That is one way of doing things... but you would need to the percentage tables for that method. I show that method in another video. But if you are thinking for self-employment, then yes, you would multiply your "net earnings" by .153 (15.3%) to arrive at the total self-employment tax due.
Nvm... let me just tell you how I arrived at my numbers... if you use the "taxable income" that I have as an example and go to the tax tables in the 2017 Publication 17 , under the column for head of household you will find the "tax liability" I will admit that i may be off by 4 bucks but I was using that as an example so i want to concerned with accuracy. Hope that helps.
Kandice-N-TheMiddle (14 days ago)
I really just multiplied the taxable income you gave of $23,500 by .15 (15%) I'm not sure if that's really how it works for these kind of taxes though.
EC EC (21 days ago)
Thanks for all the vids. Anyway i can contact you? I have questions about taxes and sole proprietorship.
EC EC (20 days ago)
Action From Square One thanks i just emailed you
Hello and thank you for watching! You can send me an email at [email protected]
kathy neely (24 days ago)
thank you
Thank you for watching!
Shannon Zittlow (1 month ago)
Trump Maga 2020🇺🇸🗽🇺🇸
Well thank you for watching!
Alan W. (1 month ago)
Excellent graphics and explanation.
Well thank you and thank you for watching!
Mushky Fuchs (1 month ago)
Wow you are such a great teacher! I never dreamed I’d watch a 30 minute video about taxes without getting up for a second! That was so informative and really clear. Thank you!
Wow... that just does my heart some good to hear. Thank you again for watching and the awesome comment!
Becca R (1 month ago)
Loved your video. Would independent contractors qualify for that QBI deduction?
Becca R (1 month ago)
Thank you so much!
Hello Becca and thank you for watching!!! Yes Independent Contractors would qualify for the QBI deduction. However, as with any new tax law... there are going to be some exceptions, limitations and thresholds... so in true tax preparer fashion I'm also going to say it all depends.
LOKHighest (1 month ago)
How would you help someone who makes 400k a year as 1099?? Could you help that business and keep them from paying to much??? Trump ended up on the great end if this spectrum...How could u help a business as such??? Are you teaching us to file or will you file for us??
That is a loaded question lol. First it would all depend on where they are in their business and the type of business structure. As far as keeping them from paying too much... I know I could keep them at paying only what they should be paying (paying too much is a matter of opinions). All of this would achieved through the bookkeeping process and quarterly meetings to ensure that whatever plans and process that we previously put into place are still on track and of course through the tax preparation process. And lastly, My goal is to do both - teach you how to file so you can be aware and know... and if time doesn't permit you to do it yourself I can file for you. Hope that answers your question. Thank you for watching!
KRYSTAL GLOVER EL (1 month ago)
How will it effect your business taxes if you have a LLC who's dividends goes to a holding company or a life insurance policy?
Ok well without knowing all the details I can this... If an LLC being taxed as an S-Corp is issuing dividends, then the S-Corp will write off the amount of dividends paid and the person/entity receiving the dividend will report it as income. The next question that I have is... is the life insurance policy the owner of the LLC? or is it that they are separate and because most life insurance policies are tax free, we are trying to avoid capital gains tax buy transferring the gain to the policy?
KRYSTAL GLOVER EL (1 month ago)
I had a feeling that you were going to say that about the dividends... Dividends as in gains. What about if the gains are going into a life insurance policy? Please breakdown if it differs with a SCorp/Single Member LLC. Ase
Hello and thank you for watching! That is a loaded question lol. LLC's, under normal circumstances, don't issue dividends. So that leads me to believe that there is something more at play and to answer the question properly... I would need to know a lot more information. But, to answer it generally... LLC's are pass through entities so, in general, the amounts earned from the LLC would be pass through to the holding company and the holding company would pay the tax. Hope that helps.
58059236 (2 months ago)
Thank you for uploading! I'm the new Lyft driver, but I've already driven for 4 days w/o using MileIQ, so how can I file a tax deduction for those missing mileages?
58059236 (1 month ago)
Thank you so much again! Are you a CPA? You're amazing!
For tax purposes you will have to show proof of your expenses to your preparer, but you will keep them. You will only need to show them to the IRS if they ask.
58059236 (2 months ago)
During the tax season, do I have to provide all mileage written documents to the CPA and to IRS? I'm not sure if I still have to provide any receipts for customers ( gums, candies, water)? Thank you for instant response!
Hello and thank you for watching! If you haven't used an app that's perfectly ok. All you have to do is back track. Try to remember your to and from and see if you can track them that way. Use google maps to help you. But going forward make sure that you keep track! Good ol' pencil and paper works perfect!
Exist N Nature (2 months ago)
Moving my company to llc this year.
Oh good... as long as it wasn't for tax purposes. :) And if you haven't already, since you are making the move to LLC, you should consider enrolling into my tax course and checking out some of the free videos. Here is the link: http://selfemployedtaxacademy.com/free-video-traning/
Exist N Nature (2 months ago)
Action From Square One To build a business credit and protect my name.
Hello and thank you for watching! May I ask WHY are you moving your company to an LLC?
Kenneth Manspeaker (2 months ago)
Excellent Video... Just subscribed... Complicated subject explained in simple terms. Thanks
Thank you for watching! I'm glad I was able to simplify it for ya.
Traci S Campbell (3 months ago)
Great advice and tips on entrepreneurship....thanks for sharing
Traci S Campbell (3 months ago)
Thank you very much! Appreciate the support. :-)
Hello Traci and thank you for watching! I love Purpose Pays The Bills! Great job on what you are doing!
Daniel Newman (3 months ago)
I love you trump. I remember when that old dem lady had a facebook video trying to scare everyone into not voting for this bill so they can continue to redistribute the wealth of people who worked their ass off for that money
Host Half (3 months ago)
17:48 If you want to skip to the part he discusses Self Employed Tax
Gwen Deane (3 months ago)
Thank you so much for the information! You are very clear and detailed easy-to-follow
Thank you so much for watching.
James Nelson (3 months ago)
Well done! Simple and easy to understand the scenarios described. Can yo provide more details service businesses(S corp) that don't qualify for the 20% pass through? It's my understanding that accountants, dentists, veterinarians and others smaller service businesses may not qualify.
Hello James and thank you for watching! I must say that you are correct when you are describing the "service" business and most small business fit under that description. But here is the twist... its a generalization... meaning that they will still qualify for the 20%, its just going to start to phase out completely once their income reaches a certain level. And don't quote me on this... but I do believe that level is around the $350,000 mark. Hope that helps.
Mfbsmd sifsai (3 months ago)
where did you find all this information?
LOL... 10 years of researching and i'm still learning. I will forever be a student.
Mfbsmd sifsai (3 months ago)
thanks for using examples alot of people just talk about the laws but never mention numbers.
Thank you for the thanks!
QTee (3 months ago)
This is excellent stuff - thanks guy... i may start doing them myself if i can find useful info like this. Definitely will follow your channel.
QTee (3 months ago)
Oh hell yeah! $12K?? Well alright! Lol i like it already
Lol... Thank you for watching!
QTee (3 months ago)
No, i will not be doing this myself (ugh) but i have to get my expenses in order and reciepts are everywhere-- i do wonder if agent orange did the 1099 right?-- and truth is, i really hate paperwork... just mind numbingly boring
QTee (3 months ago)
I have to do this today :/ ... i hate thinking about it but last day-- i totally procrastinated...
Uigei (4 months ago)
Ty...how do you figure business percentage. Most of my clients are 50/50. But I want to be more exact..what do I take in account when figuring? Time, mileage, who is using the car, phone etc. If you could even send me in the right direction that would be greatly appreciated...
Hello Uigei, I would love to help, but I don't quite understand exactly what it is that you are asking... can you rephrase the question?
Uigei (4 months ago)
Thank you for watching!
Luke Bray (4 months ago)
Does a sole proprietor have to form an LLC to take the deduction?
Thank is an excellent question and one that I get asked often... and the answer is no. Fortunately the deductions are the same across the board. There are few extra tricks you can do when you are an LLC or Corp, but of the most part everything is the same.
felix fernandez (4 months ago)
Thank you sir! And thank you for watching!
MakeupN Sippycups (4 months ago)
Michael can i please contact you! What’s the best way?? Email?
Trichome Juice (4 months ago)
Brief isnt exactly the right word lol
Trichome Juice Lol!!! Yea i guess 30+ minutes would not be considered brief... but thanks for watching lol.
L0S0YungDr0 (4 months ago)
What state are you located in?
I'm on the West Coast... Sunny California
Nice video. Will dive into more. Do you have any pointer/info on claiming 9 exemption and quarterly filing instead of withholding and annual?
Terry Del Rio (5 months ago)
Great video! Now I need to watch more of your vids. Trying to figure out how to setup my business.
(StyleME) StyleBitsnBobs (3 months ago)
Terry Del Rio setting up yourself for taxes for self employees, ex. Online tutoring
Terry Del Rio (5 months ago)
Action From Square One heres my issue. Im a real estate agent and I also do some work as an independent contractor in California... wondering how i can take advantage of the new tax law moving forward. Do i set up two s corps..or one umbrella corporation...... Im doing my homework because Im pretty clueless right now.
Terry Del Rio Thanks for watching! Hey thats a great idea. Maybe i should do a video on how to set up your business for tax purposes... what questions would you want answered?
Matt Reed (5 months ago)
Great Video
Thank you for watching!
Aticus24 (5 months ago)
Great summary. Great enthusiasm. I subscribed and liked even if i never watch another video. Great work and im sure you put in lots of ti,e to compile this. Thanks from NY
All the way from NY... Now that's what I'm talking about! Thank you for watching!
Ace Master (5 months ago)
Thank you!
Thank you for watching!
Reality is a Comedy (5 months ago)
Hi I am here to support you and your channel. Feel free to follow me back for support if you can. I’m watching this video to see how the new tax law effects a sole proprietor
Thank you for watching and for the support! I will definitely return the favor. I think the new tax law will be good for some and for lose who don't report a lot of income it may not change anything.
Serenity Love (5 months ago)
If I made 14000 how will I get back? Is there a list of general amounts you know to where you you can see what you will get.
Great question... and the answer is simple really... you can only get back what you put in... unless you have dependents lol. Thank you for watching!
hypekills187 (5 months ago)
Such a helpful video. I am a new viewer and hit subscribe 5 minutes into this video. A friend and I are looking into starting a small business as independent contractors. Do you have any videos or information that you can link me to the best method of starting and filing? (sole proprietorship, llc, ect) we have both heard to many different methods from different people, now we're lost and confused to which is the most beneficial to us.
Hello! I would love to opportunity to provide some helpful insight. Shot me an email at [email protected] so we can plan our conversation.
hypekills187 (3 months ago)
Thank you for the reply back. We have been researching and asked fellow business owners in our field many questions to figure out the best business structure for us. We ended up with all different suggestions from LLC to gerneral partnership to Sole Proprietors. Some advice from you would be greatly appreciated.
Wow I wish I would have seen this comment earlier... If you are still looking for answers I would love to speak with you and your friend as I am looking to create a training series for people who are looking to solid answers to ones like you just asked. Send me a message and set up a time talk if you are still searching for answers... if not - Thank you for watching!
Rohany L (6 months ago)
Lots of great info!! Thanks! Also, my question is... I just started my online shop in 2017, I spent more than I made. Do I need to report my self employment business?
Heck Yea!!! Also, thank you for watching!
willie robertson (6 months ago)
Thanks for the break down. I have done my taxes for years, I use Tax Act. I like that the new tax has doubled the standard deduction but hate they took the personal exemptions. It's as if they gave a little and took a little. I used to itemize but now that they took the state write off it might not be worth it. I probably won't itemize going forward. Do you think they will, or have they already screwed with charitable giving? You should drop your academy link in your description and make it clickable.
Thank you for watching Mr. Robertson! You are right they did give us a little and they took a little. However, in all the scenarios that I have done, so far I have yet to see anyone earning under $150,000 be negatively impacted (notice I said yet). As far as itemizing goes... yea it would appear that itemizing may become more a challenge for some, but i would suggest that you still go for it and see what happens before you rule it out. The charitable give has been given a positive boost so no worries there. And I think you are right I will add a link to the academy in the description thank you for that idea!
Mary Maiwald (6 months ago)
Awesome! Looking forward to do my taxes, paying what I owe and earning a butt-load of money this year!
Now thats what I'm talking about!!! You go Gurl!!
Stay True (6 months ago)
What is the best website to file my taxes?
Thank you Stay True! I appreciate the kind words.
Stay True (6 months ago)
Action From Square One Thanks a lot I enjoy your channel and watch previous videos. You deserve way more subs , you have good videos. Look forward to more.
Well that all depends on personal preference and level of understanding. For the most part all the softwares should have a simple to use interface and as long as you understand what needs to be entered you will be good to go. Me personally, I have tried Turbotax and H&R Block online and they both appear to be easy to use.
Angela Ross (6 months ago)
What is your email
Frederick Eshun (6 months ago)
You're the best teacher. Keep up the good work. I'm one of your newest disciples
Frederick Eshun Thank you for watching and the kind words! I look forward to teaching more
Millennials Painting (6 months ago)
Millennials Painting Congrats on starting your business & thank you for watching the video! I didn't understand the last question could you rephrase it?
Moneda Campbell (6 months ago)
I have a question I'm new to doing my own taxes and need a lil help if possible plz lmk..
Sean McGee (5 months ago)
Turbo tax-Self employed, Online, I found to be the best way to file your taxes...if you have a question on a particular topic, the answer is right there...it also guides you through the steps. There is a lot of other stuff in there it will ask but just skip over it if it doesn't apply...example will be, they will ask you if you own a farm.... ;-) easy answer right? Anyway, Try it out...anyway, if you dont like it, you wont get charged. Hope that helps.
Moneda Campbell ok... well if you are using software, you should be able to indicate that you are self-employed and it should prompt you to enter your income and expenses. From there it should report the income on the appropriate lines of the 1040. If you are doing it manually, then you would report the W2 earnings on line 7 and for the self-employment, you would first enter your income and expenses on a schedule c and then put the end result on line 12 of the 1040.
Moneda Campbell (6 months ago)
I basically got my w2s in but don't know what I'm doin as far as self employment I had found a video on here last year that took me step bye step and itz been removed
Can you define help? lol... is it one question or do you need the full gambit?
Moneda Campbell (6 months ago)
How much you charge to help with self employment
Nicole xo (6 months ago)
Hi, Tyrone! How can I contact you?
email sent
Nicole xo (6 months ago)
Action From Square One my email is [email protected]
Nicole xo (6 months ago)
Action From Square One where can I find your email?
Nicole xo email works 😁
Michael Blackwell (6 months ago)
I also subbed.
Michael Blackwell (6 months ago)
Great video my man. I need to talk with u about getting me straight on a 1099 venture with a single member llc. I just want to make sure I'm doing it the right way.
Of course you can get some assistance lol... but seriously though.
ButtaBCoA BCoAGAMING (5 months ago)
Michael Blackwell same can I get some assistants my first time dealing with a 1099 or taxes period
Email sent
Michael Blackwell (6 months ago)
Action From Square One- I replied to [email protected] fromsquareone.com. you can hit me up at [email protected]
Michael Blackwell im not sure which gmail that you have but i haven't received anything
jboymontel1 (6 months ago)
Long story short: I need kids😂😂😂
92HondaEX (17 days ago)
I got four here.... :P
Joseph Vittur (2 months ago)
asdf asdf said the person in the thread
asdf asdf (2 months ago)
everyone in this thread is retarded. kids cost a lot, that's why people with kids get a break.
QTee (3 months ago)
jboymontel1 thats the only people that should be complaining are the single people! We carry the financial burden for this country and uncle sam isnt giving us shit back... he's just going to tax that ass
Joseph Vittur (4 months ago)
Uber and Lyft are both great, I do them both as wee, but if you are doing just that, you are leaving a little cheese on the table. My kids are grown, I step down from a supervisor position to just a part time, increased my deductions to 9 to take no federal taxes, joined a network marketing program, started a program that taught me how to shit my income, use the tax savings to pay off my debt.
Ericha Hernandez (6 months ago)
Question, We have a non profit soccer club. My husband got paid as a coach, he coach’s and it’s also his club. We have a 1099 misc for him, but do we file this as business income on the schedule c or as other compensation? If we’re filing online through taxact or something similar, will they automatically calculate the self employment tax? Thank you, your video is super informative.
Ericha Hernandez (6 months ago)
Action From Square One hi! Already sent you an email :)
Ericha Hernandez that is an excellent question but i feel like i need more information. However, if he was paid a 1099-Misc with income over $400, by law he has to file on SCH C. And any decent online software should automatically calculate the self-employment tax.
Colorsof Avon (6 months ago)
Great content! Is the mortgage interest tax deduction still available?
Thank you for watching and the kind words! Yes the mortgage interest tax deduction is still available... its just that many people will find themselves in a situation where deducting mortgage interest may not advantageous. The reason is because the Standard Deduction alone is now going to be the amount of what most would itemize.
This is the BEST explanation I've seen on the subject this far. Thank you!
Workforce & Personal Development Thank you for watching! And for the kind words!
Willie Caldwell (6 months ago)
Can you do another video on how the self employed file a perfect tax return for 2018? Like the video you did in 2016.
Willie Caldwell for now... everything is the same.
Willie Caldwell thank you for watching both videos👍 I wouldn't mind make an updated video and I probably will, but I would have to wait until around December when the IRS releases the new 1040.
Kalid Ali (6 months ago)
I’ve been watching YouTube videos more than 10 years and never been happier. Lots and many thanks brother
Kalid Ali (6 months ago)
I Respect you Brother Tyron. ALLAAH bless you.
Kalid Ali... Thank you for watching!! And the comment has made my year! Thank you!!!
Sir J the Precision (6 months ago)
Hello, Square. When should I expect uber to have 1099K available? On Partners I don't see the yearly summary or the 1099K available. All I see is the 1099MISC. I can't see total miles for year. Thanks, man. Take it easy.
SideHustle 247 (4 months ago)
From what I have heard uber was not providing a 1099 misc of you made less than $20,000 they sent that 1099k form I drive ubereats i did not make over $600 in 2017.
Hello David... Square huh... ok lol. Im not sure about Uber I know that Lyft is available as I have done a few returns already for them, so I am assuming that Uber should soon follow. As far as the miles goes I hope you were tracking your own as well.
TheChatterFox (6 months ago)
Wow, this was really an informative tax video, and your personality actually made it fun to watch. Your presentations are also clear, precise, and to the point without all the jargon making it easy to follow. So yeah, you got yourself a new subbie. Looking forward to more great videos and making 2018 the best year in business yet. Oh, and by the way, I like watching your videos on personal taxes also. lol :)
Mike Last name (6 months ago)
Thank you for the info. Subbed
Mike, Thank you for watching and subbing!
I really enjoyed this video. Great stuff. Thanks. I guess qualifying relative is now extinct? What video editor do you use?
Elite Entertainment (6 months ago)
Thanks trump
Airbugg (6 months ago)
can you do a video for ebay sellers?
Margarita Octa (4 months ago)
Action From Square One can you please help me
Would you be willing to help me?
Suad Ali (6 months ago)
Bro, I am loving your video's as simple as you can make it to understand. Wish you had more tax related videos.
Hello and thank you for watching! I'm glad I was able to make taxes more digestible. What type of tax related videos would you like to see?
Credit Repair (6 months ago)
Thank you for watching!
Car Tech GA (6 months ago)
And thanks for sharing this video .another question on. Of my friend she is single mom and she has 1 kid .is that new examption law will effect her .because one of her friend last year fill tax and put their name in his tax fill and they money back .because she was not able to work ?
Ok I think I understand better now... well... truth be told, your friend is not legally allowed to let someone use her child for tax purposes. So even with this new tax law... nothing changes. In order for anyone to be able to legally claim a child as a dependent on a tax return, there are a list of rules that must be met.
Car Tech GA (6 months ago)
Action From Square One .one of my friends she is single mom and she is not working at all.last year she got sombody use her kid to do the tax return fil and she and he they both goth money and they split it .but i am mot sure with this new low till they are able to do it or no?
Hello... I'm not quite sure I understand the question... can you rephrase it?
Car Tech GA (6 months ago)
Hey i have question .interest for credjt card is diductable or no ?
Hello and thank you for watching! If the the credit card is 100% business use than yes. If its split between both business and personal, then only the amount of interest that is allocable to the business use can be deducted.
Colorsof Avon (7 months ago)
Paid A Lot of interest in student loans this year, glad that's safe. Thanks for the info! Best wishes
Colorsof Avon Thank you for watching! Yes thank God they kept that part lol.
Reivaa Ree (7 months ago)
I have a question..I’m trying to find out how shoul i file... i just got married in July and my husband don’t have any income he’s from Jamaica should i file how, mfj, or mfs... please help me
Hello Reivaa Ree and thank you for watching! I would love to answer your question but I would need to get more information that would be considered private. Therefore, I would want to ask you publicly on YouTube, so please send me an email at [email protected] From there I'm sure we'll be able to get you the answer you need. And congrats!!
Jessica Huff (7 months ago)
This was very helpful!! Great Explanation!! Thank You So Much!!
Hello Jessica and thank you for watching!!
Ben Osborne (7 months ago)
Thanks so much!
Thank you for watching Ben!
Kesselee Dennis (7 months ago)
You have enlightened my mind so much..Thank you a lot..
Thank you for watching another one!

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