Tax Time is Coming!!!
April 15th
Here are some tips that might help you with this time of year!
Tax Software
If you’re doing it yourself this year, you may want to try using one of these more popular tax software programs. Here is a little info on each & where to get them.
H&R Block TaxCut Platinum Home & Business Edition
You may be familiar with them for its tax services & they bring that expertise to this software. TaxCut Platinum Home & Business edition comes complete with more forms than any other home and business tax package, including Form 1040 for Sole Proprietorships, Form 1120 for Corporations, Form 1120S for S-Corporations, Form 1065 for Partnerships, Forms 940 and 941 for Payroll Returns, Form 1041 Fiduciary Returns, and Form 990 for Non-Profit Organizations. TaxCut Platinum Home & Business Edition is complete with all the new tax law changes, plus the program comes with FREE Personal State Tax software and FREE Electronic Filing. (Both after mail-in rebate.) H&R Block TaxCut Platinum Home & Business Edition retails for about $49.95 & can be found in most retails stores, such as Staples & OfficeMax, as well as their website www.taxcut.com.
Intuit’s Quicken TurboTax Home & Business
TurboTax Home & Business is the complete tax preparation program for sole proprietors. It combines the power of TurboTax Premier with special features and advice for your small business. You'll get everything you need to prepare and file your personal and small business taxes. Plus our smart tax-planning strategies, expert advice and a comprehensive tax library can empower you to make educated tax preparation decisions. Strategic small business tools help you maximize your depreciation deductions for properties, income and expenses. Plus, you'll learn how to make the most of home office deductions, find business-specific audit items before the IRS doe, plus the program comes with FREE Personal State Tax software and FREE Electronic Filing! TurboTax Home & Business retails for about $69.95 & can be found in most retails stores, such as Staples & OfficeMax, as well as their website www.turbotax.com.
2nd Story Software TaxACT Deluxe
TaxACT Deluxe includes federal & state return filing. TaxACT provides the same type of format and direct access to forms for entering information as the other packages mentioned. It is able to present the interview questions and the form at the same time. TaxACT Deluxe retails for about $19.95 & can be found in most retails stores, such as Staples & OfficeMax, as well as their website www.taxact.com.
In addition to the software that is offered by these companies, most of the websites allow you to do your taxes right online!
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Home Business Tax Deductions
It’s a great time to think about some of the deductions you might be able to take this year. Being a home based business owner, these deductions can be very helpful!
The general rule is that things are deductible if they are both ordinary and necessary. Ordinary means that someone else that owns a business like yours would most likely have the same type of expense. Necessary means that you need it in order to operate your business.
Here are some of the most common deductions:
Auto Expenses
The standard mileage deduction is 34.5 cents per mile. If you choose not to use the standard mileage deduction, you may want to gather your receipts together for gas, insurance, repairs, car washes, etc. You’ll be able to deduct these expenses for the same amount of usage that you use your vehicle for business. For example, if you use your vehicle 80% of the time for business & 20% of the time for personal, you will be able to deduct 80% of the total amount of the expenses for a business deduction. However, if you have parking garage fees or tolls, they are 100% deductible.
Credit Card Interest
If you use your credit card for business expenses, you can deduct the interest you pay. If you use the card exclusively for business expenses, the finance charges are 100% deductible. If your card is used partially for business expenses& partially for personal expenses, your need to prorate your interest just as you do for your auto expenses.
Education
Any type of education that you obtain, such as educational courses, conferences, & seminars, which pertains to your business, can be deducted. You are even able to write-off magazines & books that provide occupational guidance.
Equipment & Furnishings
Any purchased equipment &/or furniture can be expensed in full (up to $24,000 worth) or be depreciated over the IRS’ mandated 5 or 7 years.
Home Office Expenses
You are able to deduct a percentage of your rent, mortgage interest, real estate taxes, insurance, utilities, repairs, & home improvements if you have a space in your home that is designated for conducting administrative tasks associated with your business.
Independent Contractors
Any work completed by an independent contractor or consultant can be deducted as a contract labor expense. Remember, if you pay them $600 or more, you should submit a 1099 form as well.
Meals
Meals that you had with someone while discussing business, in town or out of town, can be deducted. 50% of business meals are deductible. Keep receipts for your meals & make a note on the receipt regarding what you discussed & who you were with.
Telephone
If you only have one phone in your home, you are not able to deduct the monthly service charges, but you are able to claim the cost of the individual business calls. The cost of a second line or a cell phone can be deducted to the extent they were used for business.
Travel
Lodging & transportation expenses you incurred while traveling for business (including conferences) are deductible. Keep your receipts for things such as hotels, airfare, taxis, etc., and don’t forget to include tips!
I hope you find this information valuable & makes your tax time a little bit less stressful!
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