Filing a Tax Return Next Year for Your Home-Based Business? 2013 Home Office Deduction Simplified

Commentary, Law / Tax & Zoning
February 28th, 2013 No Comments »

It’s long been debated among home officers, small business owners and even teleworkers – and their accountants and tax advisors: Take the home office and home-based business tax deduction, or decline? The arguments on both sides may be valid. Though now, the process is simpler.

Some advisers say to take every tax deduction you legally have available. Some home officers fear the resulting possible (mythical?) red-flag that could arise and draw a tax audit.

Regardless of one’s perspective, this year might strengthen the argument to take the deduction. The White House announced in January news on tax filing for home officing. The IRS for this tax year is allowing home-based workers to deduct $5 per square foot of their office space. As the news media reported (lousy photo notwithstanding), the total deduction would be limited to 300 square feet, or $1500. ?The change takes effect for tax year 2013, or effective when home-based workers file in 2014.

Some suspect the move will simplify deducting home office space for the some 3.4 million Americans who claim the deduction.

Again, the general caveats remain:

– The space must be used regularly and exclusively for work. No in-law or guest quarters between 5pm-9am.

– This also applies to teleworkers. But telework generally has been acceptable for those who telework at the pleasure of the employer, not as a convenience for the worker.

– Check with an accountant or tax planner to discuss your situation. Read more about the existing IRS rules.


Tax Planner Says: Independent Workers Must Fend For Themselves

Commentary, Law / Tax & Zoning
March 1st, 2012 No Comments »

June Walker always is a wealth of tax-related information. Her most recent post from June Walker Online continues the stream of powerful tax insights for home-based and independent workers.

This year’s Sunday New York Times Special Tax Section (February 12) had full-size pieces about a new IRS form for capital gains taxes and another on tax-efficient investing. Some of the articles, such as the wrestling match between Congress and a revised tax code, ought to interest all of us, self-employed or not.

However, for the 40 million-plus self-employed people in the USA nothing specific. Oh yes, there are two paragraphs, near the end of a long Tax Tips piece, about the advantages of a home office.

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Work from Home Write-Offs: 5 Ways to Trim the Tax Bill For At-Home Businesses

Guest Column, Law / Tax & Zoning, Legal & Accounting
May 21st, 2011 No Comments »

Millions of Americans operate businesses from the comfort of their homes. For many, the benefits of working from home relate more to lifestyle than money. However, many people already working from a home office — even as a teleworker — overlook the potential tax benefits that come from working at home.

The following post from mortgage researcher Phil Green highlights five of the most prominent potential tax deductions for individuals working out of their homes (it is not from; any information or inaccuracies provided are the responsibility of the author).

One keen bit of advice from Phil: In considering these or any possible tax benefits, consult with a tax professional. Tax laws are complex, as there are often exceptions to the exceptions to the rule. And tax regulations change all the time. Getting a professional to advise you on how these deductions can help minimize your tax liability is imperative.

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Year-End Tax Tips for the Small, Home-Based and Independent Business

Law / Tax & Zoning, Legal & Accounting
December 16th, 2010 1 Comment »

June Walker, tax guide to the small and independent business owner, has a few choice insights for all home-based and small business owners as we head into year’s end.

The Small Business Jobs Act went into effect in September. Now, I know you have little time if any time to think about taxes. It’s a most busy time of the year and besides — taxes! Come on June, this is not where our heads are at.

I understand so I’m going to give you a very quick rundown of those things that I think may have an impact on you.

Read the 10 items below that I think may help you.

Then discuss with your tax pro. Some are in effect for 2010 only and some for 2010 and subsequent years. Use the links below to direct your tax pro to more information. This isn’t layman stuff for you to try to figure out. Your job is to be sure your records are complete and that your tax pro is on her toes and aware of all these changes.

The Small Business Jobs Act Of 2010.?Simply stated:

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Never Too Soon – or Late – For Soloist & Home-Based Business Taxes

Law / Tax & Zoning, Legal & Accounting
September 14th, 2010 No Comments »

Taxes: Which ones and how much do I pay? It’s the question that bedevils home-based business owners and home office dwellers. Real estate tax, Social Security tax, sales tax, excise tax, city tax, federal income tax, state income tax, personal property tax, gross receipts tax, fuel tax, Medicare tax, luxury tax – the list goes on and on.

As an indie which and how much tax do you have to pay?

Independent tax consultant June Walker offers a simple overview of the two Federal taxes for which indies are liable. They are federal income tax and self-employment (SE) tax, and their calculation is combined on your federal tax return.?When you make estimated tax payments, each payment is a combination of these two taxes.

The following explanation does not include any taxes unique to each state and or local government which may apply to your indie business or geographic locality… Read More »

Home-Based / Small Business S Corps Beware: Changes Loom

Law / Tax & Zoning, Legal & Accounting
June 25th, 2010 No Comments »

Congress has been busy debating tax legislation over the past few months. The newest legislation being considered, the American Jobs and Closing Tax Loopholes Act of 2010, is designed to extend unemployment benefits, create new jobs and encourage economic growth.

According to South Florida CPA Jeff Bolton, the legislation achieves these goals through unemployment benefit extenders (Emergency Unemployment Compensation program, Extended Benefits program and extension of Temporary Assistance for Needy Families program) and new job programs.

There is also a provision that many S-corporation shareholders may find alarming. The bill includes language designed to close “tax loopholes” that allows certain business owners to minimize the amount of employment tax paid.

Key Point: If this bill becomes law, shareholders of S-Corp’s may be required to pay more in payroll and social security taxes due to changing self employment tax rules.

Read More »

Tax Tips for Home Office, Business Travel & Road Warriors

Create & Run Your Biz, Law / Tax & Zoning
June 15th, 2010 No Comments »

June Walker, a tax advisor to the independent / soloist / self-employed and home office business community since 1979, has guided indies through various tax issues for years.

Today, she offers some guidance on?handling business and travel expenses. To June, the questions seem the same: Travel expenses, transportation expenses, vehicle expenses – aren’t they all more or less the same thing?

Well, maybe to you they are, June says. But not to the IRS. There are subtle and there are grand differences. Understanding standard business travel and the expenses related to a typical business trip is the place to start.

Over the river and through the woods to Grandmother’s house goes Pat Personal Trainer. Gram just bought a color laser printer and it’s the cheapest way for Pat to print his new brochures. He leaves Friday afternoon. The bus gets him there in time for dinner. He works at the computer all the next day until the wee hours. (He’s sure these new brochures will get him lots of customers.) Very early the next morning he kisses Grandma good-bye and heads back home on the bus.

Pat was away from his home, for business, overnight. It was BUSINESS TRAVEL. Therefore he may deduct travel expenses.

The IRS says this about BUSINESS TRAVEL . . . Read More »

Hey Freelancer: Boost Perceived Value & Pay More Taxes in 2011

Law / Tax & Zoning, Solo Business Strategies
April 14th, 2010 No Comments »

It’s tax time. How’d you do in 2009??Some home-based or small business entrepreneurs believe paying little in taxes is a good thing. After all, it’s not what you make. It’s what you keep.

But healthy quarterly (or monthly) tax deposits are a sign of a healthy business. Your strategy should be to ensure you keep monthly revenues strong — and then work with your accountant or tax advisor to reduce your tax liability.

How can you boost your revenues? One way is to boost your perceived value.

In a recent edition of Marketing Minute, Marcia Yudkin wrote about a?subscriber who asked, “Invariably once we?finish a project, our customers say the work was worth many?times what they paid. But getting them to understand the?value ahead of time is hard. Any suggestions?”

Marcia wrote about Steve Slaunwhite. The co-author of?The Wealthy Freelancer suggested asking clients or prospects first what their expected results may be.

“The more you position your services?around the results you can help a client achieve, the more?likely you are to get the job – at the price you want.”

For example, he suggested asking… Read More »

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