Taxes for small businesses
- By Ryan Paulin
- Published 04/18/2010
- Finances
- Unrated
Taxes for small businesses
Being self employed can be quite exciting, except when it comes to tax season. All year long you’re earning your own money, but come tax time, this income needs to be reported.
If you are self-employed or you are a small business owner you will need to file taxes. If you are a sole proprietor the taxes you file will be associated with your own taxes and your own tax id number. Those filing takes for their business, or those who are self-employed will need to file at 1040 and a Schedule C.
A Schedule C is an IRS tax form. The Schedule C is used by taxpayers to report the income information to the internal revenue service. This income information includes the profits and losses of their business. Therefore, Schedule C is also called the Profit or Loss from Business.
Completing the Schedule C tax form which is sent to the IRS is moderately difficult and takes about an hour or two to complete depending on the businesses books, organization and overall paperwork. You can pick up a Schedule C form from your local post office. In order to fill out the form you will need to know the principal business type or profession, the name and address of the business if different from the owners name, the Social Security or TAX ID number of the business owner and whether or not the business operates on a cash accounting or cash accrual basis. If you are just starting a business it is probably best to talk with a tax advisor regarding your taxes – specifically for the first few years you are in operation or at least until you can fully understand how to file your business taxes.
There are a lot of things that a self-employed person can write off during tax season. If you use your car for your business you can calculate the standard mileage which is 50 cents per mile as of January 1st 2010.
Business related entertainment is also a deduction. However, you can only deduct 50% of the expenses for entertaining your clients and customers for business purposes. There was a time when you could write off 100% of your entertainment expenses, but now it is only 50%. Entertainment includes ball games, meals, drinks, parties and so on.
If you work from home, this can also be a deduction. You can deduct a portion of your rent or mortgage as well as some of the costs like utilities, remodels and insurances.
If you are organized come tax time you will be in better shape. Keep you receipts and your canceled checks for your business expenses. Document things like auto expenses, travel, rent, utilities, entertainment, advertising, marketing and business related fees. If you are organized you will be less likely to get yourself in a bind come tax time or if you are ever audited. The IRS says more people get in trouble because they don’t have records, not because they were dishonest.
If you are self-employed or you are a small business owner you will need to file taxes. If you are a sole proprietor the taxes you file will be associated with your own taxes and your own tax id number. Those filing takes for their business, or those who are self-employed will need to file at 1040 and a Schedule C.
A Schedule C is an IRS tax form. The Schedule C is used by taxpayers to report the income information to the internal revenue service. This income information includes the profits and losses of their business. Therefore, Schedule C is also called the Profit or Loss from Business.
Completing the Schedule C tax form which is sent to the IRS is moderately difficult and takes about an hour or two to complete depending on the businesses books, organization and overall paperwork. You can pick up a Schedule C form from your local post office. In order to fill out the form you will need to know the principal business type or profession, the name and address of the business if different from the owners name, the Social Security or TAX ID number of the business owner and whether or not the business operates on a cash accounting or cash accrual basis. If you are just starting a business it is probably best to talk with a tax advisor regarding your taxes – specifically for the first few years you are in operation or at least until you can fully understand how to file your business taxes.
There are a lot of things that a self-employed person can write off during tax season. If you use your car for your business you can calculate the standard mileage which is 50 cents per mile as of January 1st 2010.
Business related entertainment is also a deduction. However, you can only deduct 50% of the expenses for entertaining your clients and customers for business purposes. There was a time when you could write off 100% of your entertainment expenses, but now it is only 50%. Entertainment includes ball games, meals, drinks, parties and so on.
If you work from home, this can also be a deduction. You can deduct a portion of your rent or mortgage as well as some of the costs like utilities, remodels and insurances.
If you are organized come tax time you will be in better shape. Keep you receipts and your canceled checks for your business expenses. Document things like auto expenses, travel, rent, utilities, entertainment, advertising, marketing and business related fees. If you are organized you will be less likely to get yourself in a bind come tax time or if you are ever audited. The IRS says more people get in trouble because they don’t have records, not because they were dishonest.
Ryan Paulin
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