Tax Plaza
The Tax system explained!
Home Business Legalities And Tax Advantages
Even if you work out of your home, most cities andor counties require you to have a business license andor permit. Check with your local government municipalities to find out what the requirements are for where you live. Depending on where you live, you should be able to get this information from your local courthouse or townhall.
Zoning may also be an issue. Municipal ordinances can be very restrictive about what types of businesses are allowed in a residential district. This also applies if you plan on placing a sign outside of your home. Again, check with your local government municipalities to find out what the requirements are for where you live.
In addition, depending on how your home business is structured--as a sole proprietorship, partnership or corporation--there may be forms to file with the state. The legal structure affects taxes and the liability of the owner and the home business, so it's important to follow the appropriate procedures. Contact your state's Department of Revenue for filing fees and information.
If you plan to operate your home business under a name other than your own, you will have to register a fictitious name with the county--usually referred to as a DBA filing (Doing Business As). The exceptions to this regulation are corporations and partnerships doing business under the umbrella of the corporate or partnership name.
As a home business owner, you may be required to file estimated tax returns and pay estimated taxes quarterly. If you have employees, you also have to submit taxes withheld from employee paychecks. Here are some of the taxes you may be responsible for:
Employment taxes -- Federal income taxes, Social Security and Medicare, federal unemployment and state income taxes.
Federal self-employment tax--Required by those who work for themselves to cover Social Security and Medicare contributions.
Sales tax--Each state requires a sales tax number for any company involved in selling tangible items. Sales tax is collected, reported and paid to the state either monthly or quarterly.
Unemployment insurance tax -- You are required to pay federal and state unemployment taxes if you have more than one employee on the books for at least 20 weeks in a calendar year, or if they have paid more than $1,500 in gross wages in a calendar quarter.
Again, check with your state's Department of Revenue for more information.
A home business qualifies for all of the same tax deductions regular businesses do. In the eyes of the IRS, the only difference between most home businesses and Fortune 500 Companies is their size, and the fact that home businesses can also deduct many household and living expenses.
Owning a home business will entitle you to deduct thousands of dollars in every day expenses. After all, why pay more in taxes than you have to
Listed below are just some of the items you are allowed to deduct:
Your car and car expenses.
Your mileage.
Your home computer, printer and other office equipment.
Your home. If you're not a homeowner, you are allowed to deduct the area where your home office is set-up.
If you're a homeowner, you may deduct a portion of your property taxes and utilities.
Your travel expenses.
Your restaurant meals, entertainent, dinner parties.
You may pay wages, tax free, to two of your children, if they are involved with the business.
You may deduct your families health insurance.
NOTE: To qualify for the above tax deductions, you must be actively working your home business.
In closing, since tax laws are continually changing, I highly recommend you consult with your accountant or tax advisor to learn more about applying the aforementioned deductions to your home business.
Dean Phillips is an Internet marketing expert, writer, publisher and entrepreneur. Questions Comments Dean can be reached at mailto: dean@lets-make-money.net
Visit his website at: http:www.lets-make-money.net
Taxation in the News
Orica says court loss will cost it $92m
The explosives, paints and chemicals supplier was appealing an amended assessment by the Australian Taxation Office (ATO) relating to Orica's sale of its
Taxes don't have to be hard
The IRS knows everything they need to know for most tax papers. They know your income from the W-2 and 1099. They know your mortgage interest.
Mexico targets Hollywood with tax incentives
MEXICO CITY (Hollywood Reporter) - Mexico has launched a $20-million tax-incentive program in an ambitious move to lure film production from Hollywood and
First-timers should use Free File to prepare, e-file federal tax ret urns
The Internal Revenue Service is offering a tax tip to college students and first-time filers: use IRS Free File to prepare and file their federal tax return
Anti Tax Groups at Capitol
"We are here to say no new tax to any form of taxation to that would seek to raise the revenue the state needs.
Rovi Corporation Reports Confirmation of a $2.4 Billion Tax Loss Fro m the 2008 ...
The Company and the IRS executed a closing agreement which confirmed that the Company recognized an ordinary tax loss of approximately $2.4 billion from the
Thieves Use Fake W-2s To Steal Tax Refunds
So, police are hoping to soon track them down and figure out how big the tax scam really is. Tuesday afternoon, an IRS spokesman told Eyewitness News that
Taxes
What is tax?
A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as unpaid labourInteresting articles
Federal Income TaxSeven Key Tax Deductions for the Self Employed
Self Employment Registration And The Self Assessment Tax Return Form
Innocent Spouses - Relief from Taxes
The Implications of Income Tax Charge on Estate Planning
Hidden Tax Opportunity For Tax-Deferred Investments
Discover How Government Protected Tax Certificate Profits Can Make Your Family Secure for a Lifetime!
Tax Credit for Going Solar