If you’re like most small business owners, you’re always looking for ways to lower your taxable income. Here are five ways to do just that.
1. Deducting The Cost Of A Home Computer
If you purchased a computer and use it for work-related purposes, you can take advantage of the Section 179 expense election, which allows you to write off new equipment in the year it was purchased if it is used for business more than 50 percent of the time (subject to certain rules).
2. Meal Expenses For Company Picnics And Holiday Parties
If you host a company picnic or holiday party–even if it is at your home–100 percent of your meal expenses are deductible. Prior to tax reform legislation passed in late 2017, 50 percent of your business-related entertainment expenses (with some exceptions) were generally deductible. Starting in 2018, however, entertainment-related expenses are no longer deductible. If you have any questions, please don’t hesitate to call.
A lot of us fancy having our own business. The idea of being your own boss is quite a strong motivating factor. But there is no denying the fact that you have to take care of most of the factors in self-employment. Here are the top 10 tax related question for self-employed individuals along with their answers.
- Can I avail home office deductions?
Self-employed individuals usually skip out this part with the fear of increasing their chances of being audited. However, more than 50% of businesses run from an office at home. So, you need your bother yourself with any probabilities of audit as long as you are following the ground rules. The space that you use exclusively for your business requirements is only eligible for any write offs.
- Can I deduct auto expenses?
If you are planning or are actually doing a real estate business, either as an investor or as an active participant, you will have to deal with the these:
Net Investment Income Tax: If you have net investment income and your modified adjusted gross income exceeds $250,000 for married persons filing jointly, then there is a 3.8% tax on the lesser of (1) your net investment income, or (2) the amount your modified adjusted gross exceeds the threshold amount. Note that self-employment income is not net investment income. Read More
For self-employed individuals, there are a lot more steps involved when it comes to taxes than for most people. Here are some tips to help you keep as much of your hard-earned money as you can.
If you’re self-employed, paying estimated taxes is old hat by now. But, what if this is your first time doing it? Here’s how to calculate and pay estimated taxes for the first time.
Many freelancers have trouble organizing their finances. This article walks you through how to organize finances for freelancers.
How to Organize Finances for Freelancers
The best way to organize your finances as a freelancer is to become more aware of both your business expenses and your personal expenses. This means that every month you should have a month-end budget/financial statement for your business as well as one for your personal life. This will help you understand your cash flow and organize your finances.
In order to create these month-end statements, you’ll need to organize your finances using the following three steps:
You have decided to take the plunge and become a driver for Uber, Lyft or some other rideshare program. Congratulations! You are now a small business owner and your tax return just got more complicated. The income you earn from Uber is taxable and must be reported on Schedule C of your 1040. However, you may deduct expenses incurred in earning this income.
In January, you should receive a Form 1099-MISC from Uber or whatever company you drive for. The amount should be Read More
Mortgage Broker – No Self Employment Tax.
A broker who managed mortgages received a fee when he sold his house used as a personal residence. He reported the commission as self employment income but the IRS said he has to pay self- employment tax on the commission. The Tax Court overruled the IRS stating that the commission was not subject to selfemployment tax because the sale relates to a personal transaction [Guarino, TC Sum. Op. 201612].
Deduction Denied for Amounts Paid to Children. Read More