Tax deductions for business expenses aren't just for large
corporations. As an internet marketer or online entrepreneur
it is important to know what you can and cannot deduct to
save money on your taxes.
People new to business taxes tend to fall into one of two
groups. The first group are those people who simply don't
believe they can be eligible for tax deductions. The second
group are those who believe anything they touch while conducting
business can be written off as a business expense. Both ideas
will cost you money; the former in lost tax money, the latter
in IRS fines.
In general, the kinds of things that can be deducted deal
with the ongoing operation of your business: rental costs,
utility expenses, and travel expenses. Not, for example, a
new car. Items that add permanent value to your business (i.e.
assets) are capitalized, not deducted. Interests on mortgages
or repair of computer equipment (which maintain rather than appreciate
your businesses value) are deductible expenses.
If you use your personal vehicle for your small business you
may be able to deduct repair expenses. If you have a room
in your home used strictly as a home office you can deduct
certain expenses. There are numerous ways to plug the money
leaks streaming out of your business.
Luckily, the IRS has listed in detail what you can deduct
in its free publication entitled, shockingly, "Business
Expenses." (http://www.irs.gov/pub/irs-pdf/p535.pdf)
At fifty-eight pages it is not a casual read, but it has a
good index you can use to find the parts relevant to your
business.
The IRS Small Business site
(http://www.irs.gov/businesses/small/index.html)
contains a lot of useful information and, as government websites
go, is well put together and easy to navigate. From this site
you can access practically every form needed in your relations
with the IRS and even find out how to electronically file
for free. Our tax system isn't simple, but at least they publish the rules.
Daniel Detlaf is a lifelong student and one-time Day
Trader with a few things to say about internet marketing.
Visit the home of his ebook "Make An Honest Living"
at: http://www.makeanhonestliving.com
