A Simple Option for Claiming Home Office Deduction
- Details
- Category: Business and Non-Profits
- Written by Jonah Sparks
- Hits: 558
The Internal Revenue Service today announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes.
In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction).
The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.
"This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction,"
Small Business Ownership Tax Benefits
- Details
- Category: Business and Non-Profits
- Written by Wendy Levenfeld
- Hits: 2045
Bonanza or Baloney
While it is often said that owning and operating a small business is the little’s guy’s tax shelter, the reality is that most of the tax law has little or no application to the small business owner. Many believe that any advantages contained in the law end up being a total wash in reality.
Below are areas in which you might be eligible for a tax benefit if you own your own business. You can decide for yourself.
1. Personal Living Expenses: Wholly or Partially deductible:
- Car/50 cents per mile
- Computer
- Meals
- Education
Disadvantage: detailed records must be kept indicating percent of legitimate business usage
2. Retirement Savings Plans:
- Tax is deferred until you
Top 10 Home/Small Business Tax Deductions
- Details
- Category: Business and Non-Profits
- Written by Madeline Delanni
- Hits: 5603
One of the major advantages of being self-employed or having your own home based business is that there are many allowable deductions that you can claim against your tax obligations to the federal government. These can all be found, itemized, on the website of the Internal Revenue Service (IRS).
What is important is to make sure you document all your business-related expenses and to have them documented properly.
Since a lot of small businesses get audited, and the rate is rising dramatically in recent years, keeping in mind the following top 10 home business tax deductions may help you avoid paying additional taxes and go through the audit process quickly and confidently.
Home Office Space
If you are devoting part of your home
Reducing Tax on Income from a Small Business
- Details
- Category: Business and Non-Profits
- Written by Madeline Delanni
- Hits: 9748
My after-tax income from my small business is greatly reduced by the incomes taxes I pay each year. A friend of mine told me I could reduce the amount of taxes I owe by shifting my income elsewhere. Is that true?
Answer:
Generally, you can reduce the amount of taxes you pay by shifting the income from your business from yourself to family members who are in a lower income tax bracket. For instance, instead of paying yourself the usual salary, you could employ a family member who is in a lower tax bracket and pay him or her part of the salary you would receive for service performed for the business.
The family member must perform services for your business and the compensation you pay that family member must be reasonable. Therefore