Get All Your Home Business Tax Deductions

In any home business you definitely have more tax advantages than if you were self-employed. The tax advantages become substantial when you consider how you can improve the profitability of your home business by declaring all of the deductions you are entitled to.  You may be missing some very important deductions. You must itemize your deductions for your home business operation on a separate schedule just as you would for your personal deductions. Knowing which deductions you are entitled to can save your home business hundreds of dollars a year.  Here is some background information on how your income tax amount is arrived at by the IRS.  The U.S. taxation code states that almost all income is subject to federal income tax. The way that you, as the owner of your home business, arrive at the final amount of income tax is as follows:  Gross Income – (All Expenses + Miscellaneous Deductions + Depreciation on Assets) = Taxable Income.  Taxable Income X (Your Tax Rate) = Income tax for the fiscal year.  Here is a quick definition of the terms in the above taxation equation:  Gross Income = The total of all income for the year after the cost of the inventory has been paid for.  Expenses = All costs of doing business during the fiscal tax year. Examples include payroll, materials, supplies and interest on business loans, etc. To find out if an expense qualifies as a legitimate business expense, consult your accountant or the IRS.  Depreciation = This…

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Pro Or No: Taxes And The Home Business

By Jim Biscardi The Internal Revenue Service has its hands full every April when Uncle Sam holds his hand out with his fingers gently waving towards himself saying, "Show me the money." At that same time Certified Public Accountants burn the midnight fluorescent bulb with the hopes of finding pleasing results for ignorant clients. Across town in the basement of an office, which his children affectionately call "the dungeon," the typical home business owner fiercely rubs his own brow in the hopes of finding just one more deduction. Tax season has arrived. The typical home business owner stresses out more in April than in any other season. Christmas, when his business may be booming and orders come in faster than he can write them down, or summer when his clients are demanding things that no sane person would demand in the midst of gorgeous, sunny days that call his name almost audibly to come and play-both of these seasons pale in comparison to April. The home business owner has two basic options and one non-negotiable choice to make regarding taxes. First and foremost, we must consider the non-negotiable choices, which in and of itself is an oxymoron. He must pay his taxes. While nothing might please him more than just relaxing in April, listening to the pitter-patter of spring rain and thinking about the tulips pushing their delicates leaves through his moistened soil, he must pay his taxes. Though he dreams about finding Uncle Sam in person and simply telling…

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Home Business Taxes

By Vincent Murphy Just the thought of taxes can scare people out of their minds. You have to keep all your records and documents in order to be able to file easier at the end of the year. Home business owners have their own set of allowable deductions that differ from other businesses. You have a chance to save a lot of money by knowing how to take advantage of you home business situation. Know what your deductions are. There are several deductibles that the home-based business owner is entitled to. There are auto/vehicle deductions that can help with mileage, gas, insurance, and/or other related expenses. You can write off your business cards and stationary, plus any business meals and entertainment. All business traveling expenses, education, and even the interest on your business credit card can be counted in your favor. If you use a computer the Internet service and web page related expenses could be deducted as well. Office furniture, supplies, your phone and other communication devices are also necessities that have deductions. Any postage or delivery of goods charges is also considered a business expense. The home-based owner can also get deductions on rent and utilities that keep the business running. Deductions that you will want to use on your 1040 form are: * Half of your self-employment tax amount, which can offer you a huge savings. * As much as 100% of your medical insurance costs for you and your family. If you make more than $600…

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