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Home Business Taxes
by Vincent Murphy
Published on this site: April 28th, 2006 - See
more articles from this month
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 per year in self-employment you
must file your taxes. You may qualify for the C-EZ form if
you have had a bad year or just got started. Your total business
expenses will have to be less than $5000 for that year; you
have no inventory, or have to file a 4562 form (depreciation
and amortization form). Make sure first and foremost that
your expenses are less than $5000 and that you have taken
all the deductions you are entitled to.
A large decision is who will be doing your taxes. You need
to decide if you plan to do them yourself or if you want someone
else to do them for you. There are several advantages in using
a tax professional. They can save you much time and unneeded
frustration. They can spot deductions you might miss or not
know about. It also saves you from being responsible for any
errors that were made in the preparation, which could end
up saving you thousands. No matter how you decide to prepare
your taxes be sure to claim all possible deductions to save
you money in the long run. A business has many breaks for the
taxpayer for a reason and you should make sure you know what
you qualify for and how to save.
Vincent Murphy can help you to find the best home based
business ideas and opportunities so you can work at home visit:
http://www.HomeGrail.com
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