When Does The Mileage Meter Start?
Posted by admin on Apr 30, 2008
Many small businesses require auto usage which means that you may be able to claim at least some of the mileage costs on your business’s taxes. The question is, though, when does your mileage start being counted?
If you own a small business and run it from your home, then your mileage starts from the moment that you pull out of your home. It continues until you arrive back at your home, too. This is a bit of a break for the business owner working from home. If you do not work from home, your mileage meter starts from the time that you arrive at your first business related destination and it stops at your last. Your drive to and from home does not count.
A tip: Schedule several business trips during the same day so that you get the mileage in between as a deduction.
How Big Is Your Home Office In The Tax World?
Posted by admin on Apr 28, 2008
Your home office can serve as a tax deduction for your business, if you would like it to help you to reduce the amount of taxes you pay on your business income. But, if it is not your whole home, how do you know how much you can deduct?
No matter how large the home office is or what the area of the room that it is in is, you can get a significant deduction for it. To figure out this deduction, measure your work area and then divide that measurement by your home’s square footage.
The percentage that you come up with is the fraction of your home related business expenses. This should include all items like your mortgage payment or rent payment, your utilities, your insurance and other factors. Once you do the bit of math required, you could be saving a considerable amount of business tax!
Claiming Bad Debts? You May Not Be Allowed To
Posted by admin on Apr 24, 2008
There are many items in business when you are left with providing a product or service and the buyer does not pay. Unfortunately, this is not always something that you can deduct off your taxes. The tax laws allow for some bad debt expenses to be written off, but it is specific to the type of product that you provide through your business.
If you sell tangible products such as goods from your store, then it is possible for you to deduct your bad debts through a deduction. On the other hand, if you sell services rather than products, you may not be able to claim this. The reasoning behind this is because it would be too easy for businesses to inflate the cost of how many bad debts they are incurring. Talk with your tax professional about methods to deduction that work the best here.
Are You Deducting Professionals Fees?
Posted by admin on Apr 20, 2008
Although you may not like to talk about it, you probably have several professional fees to pay over the course of your business life. Whether it is an attorney to help you to settle various problems or even your tax professional himself, deducting professional fees from your taxable business income is allowable in most cases. Consulting costs usually fall under this area, too.
If these professional fees are in response to a business need only, then they are likely to be deductible. In most cases, you can deduct the full amount that you paid to these professionals in the year that they occurred. But, if the work that they do for you is clearly for future years benefit, then you will need to deduct those costs over the life of the benefit rather than all at one time. Also, business books that help with legal and tax needs can be deducted.
Educational Expenses Can Be Deducted
Posted by admin on Apr 16, 2008
Those that are in specific types of business often have to keep their education going to actually stay competitive within their business. Lucky for them, some of the expenses associated with this can be deducted in taxes.
Consider your educational expenses. Do you need to keep your education going to remain productive and viable in your business trade? If so, then you want to have these costs considered in terms of a business deduction.
If your current business or trade requires that you maintain or improve your skills to keep your business moving, then this may be considered a business expense. But, the cost of your education to get a new job does not apply here.
If you do have these qualifications, be sure to have receipts for your tax man when the time comes. Even small courses can count if in fact you need them for your business.
Business Deductions For Those Businesses Getting Started
Posted by admin on Apr 13, 2008
Did you know that some of the expenses of getting your business started qualify as a business deduction? Most new businesses incur many costs from the start. These include things like advertising, office supplies, repairs and utilities. These are considered capital expenses. The first year that you get started you can claim up to a $5,000 deduction for them. Any additional costs for starting up your business will need to be defrayed over the next 15 years equally.
Because it is costly to start a business; and even more so because most businesses lose money in their first years; this tax law is in place. Keep close track of all of your investments into your business from the start. The IRS will require that you have records if they should audit you. This can be a considerable benefit to those looking to start businesses who are worried about taxes, too.
Take Your Auto Expenses!
Posted by admin on Apr 10, 2008
One of the most frequently missed deductions for business owners is auto expenses. If you use a vehicle wholly or in part for your business needs, it is your right to get a business deduction from that vehicle. This includes getting a deduction for anything that goes into keeping your vehicle running such as gas, repair, licensing, and even tolls that you need to pay. Keep a record of these expenses.
Keep good records of such a deduction and you will easily benefit from this deduction. The rule is, the vehicle should be being used to keep your business running, so those that help you get from home to your place of business do not usually count. There are various professions that this could happen with including those that need to make business meetings; travel for deliveries or those that need to take that client out to a nice restaurant.
Landlords: Are You Taking Your Interest To The Bank?
Posted by admin on Apr 8, 2008
There are many tax deductions for landlords. One of the largest that you may qualify for is interest deductions. Because you are operating your own business by purchasing and renting property, you are able to claim deductions on that property. The largest of these deductions, for most property owners is the interest on their mortgages.
Those that have a mortgage can include the interest towards their tax filing. Other types of interest also can be considered such as interest from credit cards from expenses that are charged to it and other loans that you may have. For example, if you secure a loan to repair the roof, the interest could be deductible.
Although it may not seem like much, most landlords pay several thousand dollars worth of interest per year on property related loans. Take advantage of this benefit that the tax code has in place for your business.
Running A Cash Business? The Government Thinks Your Skimming
Posted by admin on Apr 6, 2008
Cash businesses are often considered for audits mainly because they are the most likely to skim off the top. A cash business is one that operates through mostly cash in hand. For example, if you run a restaurant, vending machines or you run the local Laundromat, nearly all of your transactions are in cash. It would be very easy to skim something off of the top.
The IRS targets those most likely to be skim off the top for their audits. And, no matter if you file a Form 8300 (Report of Cash Payments Over $10,000 Received in a Trade or Business) or not, they still are monitoring you.
Those that run cash based business are more likely than the other small business owners to end up audited. If this is the type of business you run, do take the time necessary to file the correct information and by all means keep accurate receipts and sales ledgers.
Does Electronic Filing Trigger The Audit?
Posted by admin on Apr 4, 2008
There are rumors flying around about the electronic filing methods in place. Some believe that filing in this manner somehow causes the system to target them more so than others for the audit process. This is, mostly, untrue. The method of filing is less likely to cause a problem for you than the return itself. Errors, missing information and inaccurate information are the most likely reasons you will be audited.
But, while it will not increase your likelihood of being audited, it does get you into the batch of returns that will be scanned for potential audit faster. On the flip side, unless you have something to hide or not trusting of your return, then who wouldn’t want to get their refund faster? Instead of the method of filing your return, worries about the errors lurking on that return that could trigger an audit instantly.