Home Business Tax Deductions

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  • Home Business Tax Deductions

    1. 1. SMALL BUSINESS TAX DEDUCTIONS ...and saving money on your tax return As told by Fred, the TaxCat
    2. 2. If you own a company, you mustcomplete annual tax returns.If you run a home business and do nothave any employees besides yourself,taxes immediately became mucheasier.
    3. 3. Even though your job justbecame easier, there is basic butimportant tax information youshould know before you getstarted, plus tips on how to makethe job simpler.
    4. 4. HOMEBUSINESS TAXDEDUCTIONS
    5. 5. HOMEBUSINESS TAXDEDUCTIONSWhen launching a start-up, many business ownerswonder what costs theycan and can not deduct.
    6. 6. HOMEBUSINESS TAXDEDUCTIONSA simple rule to follow isthat deductions have to beboth ordinary expenses andnecessary expenses to thebusiness.
    7. 7. HOMEBUSINESS TAXDEDUCTIONSThere are a variety ofplaces whereentrepreneurs can deductcosts. For instance...
    8. 8. HOMEBUSINESS TAXDEDUCTIONSA few areas are supplies,advertising, travel andentertainment, insurance, repairs,rental fees, worker pay, etc. Alsodeductible is the business use ofyour home and car.
    9. 9. HOMEBUSINESS TAXDEDUCTIONSThe IRS website has additionalinformation on write offs.If you maintain documented receiptsand excellent records of expendituresregularly, tax returns will be easier tocomplete.
    10. 10. HOMEBUSINESS TAXDEDUCTIONSUse a business credit cardfor business expenses.Do not mingle personal andbusiness accounts.
    11. 11. HOMEBUSINESS TAXDEDUCTIONSFor people who dont use anaccountant, you may want totake advantage of a simpleaccounting software program likeQuick Books Pro or Quick BooksSimple Start..
    12. 12. HOMEBUSINESS TAXDEDUCTIONSThese programs organizeboth income and expensesso that preparing income taxreturns does not becomeoverwhelming
    13. 13. TAX RETURNDOCUMENTS
    14. 14. TAX RETURNDOCUMENTSThe income tax forms needed fora particular business will vary,depending on the way thecompany is organized (a soleproprietorship, corporation, scorporation, LLC or partnership).
    15. 15. TAX RETURNDOCUMENTSYou can access the requiredforms from the IRS site, withdirections for filling them out.
    16. 16. TAX RETURNDOCUMENTSAccording to the IRS website, thosewho run a sole proprietorship orLLC complete a 1040 individualincome tax return form with aSchedule C Attachment, profit orloss from business.
    17. 17. TAX RETURNDOCUMENTSCorporate entities use form1120 while S corporationsuse form 1120-S. Companiesthat are partnerships useform 1065.
    18. 18. TAXPREPARATIONSOFTWARE
    19. 19. TAXPREPARATIONSOFTWAREA tax professional can bepaid to fill out businessreturns, or you can dothem yourself.
    20. 20. TAXPREPARATIONSOFTWAREJust like individual taxsoftware, there is do-it-yourself tax preparationsoftware for smallbusinesses.
    21. 21. TAXPREPARATIONSOFTWAREYou can even find home andbusiness software packageswhich include both programs forpreparing personal returns andcorporation business returns.
    22. 22. TAXPREPARATIONSOFTWAREBuying a multi-softwarepackage most times ismarked down and can be agreat deal for small internetbusinesses on a budget.
    23. 23. TAXPREPARATIONSOFTWARERecognized companies suchas H&R Block and Intuitoffer home and businesssoftware together that youcan buy for under $100.
    24. 24. TAXPREPARATIONSOFTWAREFor people who do not like todownload and install software,Tax Act offers a web-basedprogram that is accessible onlineand you dont have to hassle withany software.
    25. 25. TAXPREPARATIONSOFTWARETax returns filled out by atax professional can set youback $500 or more, so thereis a big cost savings to doingthe work yourself.
    26. 26. TAXPREPARATIONSOFTWAREHowever, tax pros typically haveknowledge of little-knowndeductions that non-professionals miss out on, andprofessionals can of course saveyou the work completing returns.
    27. 27. Fred, the TaxCatC H E C K L I S T S , F O R M S , S O F T WA R E A N D M O R E . . . www.HomeBusinessCenter.com/tax.html

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