Income Tax Season Is Here Discussion Topic @ AdlandPro Community

Income Tax Season Is Here

Thu, 01 Feb 2007 00:56:40 GMT

Hi guys, Tax Season is Here. If anyone has any tax questions, please ask. I have worked for the "Big Three" tax franchises throughout the last 27 years as an employee, franchisee and corporate director. I don't know all the answers, but there is always somebody else out there that does know. We will keep this forum going till April 17th. Glen http://www.fransuccess.biz
Created By: Fransuccess

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 00:59:30 GMT

Glen

Thanks for this, CAn you maybe cover the importance of record keeping when it comes to home business and the allowable expenses. AS odd as it seems many home business owners do not fully understand the importance of this to their success especially early on.

Thanks

Created By: 305530

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 01:22:07 GMT

I agree Derek. I am betting that a lot of folks in our AdlandPro Community probably need help with that particular topic(s). Record keeping is very important (esp. if you get audited). There are some very creative deductions available. Please go to the following sites for great information on this subject (this will the homework for today):

http://www.irs.gov/businesses/small/article/0,,id=155244,00.html

http://www.irs.gov/taxpros/providers/article/0,,id=167107,00.html

http://www.irs.gov/taxtopics/tc509.html

and read IRS publications 587 and 4035.

Thanks

Created By: Fransuccess

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 01:39:22 GMT

Thanks for this forum,

Very timely, just bought $60 worth of ink cartridges, and said to my hubby, I am going to put that receipt with my business receipts. My business is the main use of the printer. Things like that can slip by, but at the end of the year, do make a difference. Also, regarding milage deduction, I have found that unless you use your car almost exclusively for business, which most home business owners probably don't, it is important to write down your mileage whenever you do use your car for business, those miles also add up to a nice deduction at the end of the year.

I have a good tax program that is designed for MLM if anyone is interested. I am new enough so don't know if I am allowed to put a link here, but would be happy to share it with you if you send me an email.

Keep All You Can!!!

Created By: LorLand

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 01:39:26 GMT

Hi Glen,

Thanks for inviting me to your forum. I don't really need to know wnything about my taxes right now. My husband works for 1 of the big 3 and has for many years as well.

I stopped mainly to tell you that how much I appreciate your gesture here. It's a friendly and nice forum and I just want to thank you.

Cheers!

Judy

Created By: jnsmith

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 02:42:24 GMT

Thanks so much for inviting me to this forum. What a nice gesture. I have been meaning to ask a tax person this question. I lost 11 pounds and almost 14" in 9 days this past April and have lost 5 more pounds and kept it all off. I have a shake for breakfast which I believe helps me maintain my weight. I have gone on to help others lose over 600 pounds this past year. You can only purchase this program through independent associates and purchase directly from the company. So I have received some commissions from helping others. Can I deduct the cost of the shakes and supplements since I need those to maintain my weight? My husband and 2 teen daughters have also been using this and they each have an account also. I feel that they need to use the shakes and supplements to keep the health improvements that they have benefited from- ie. stomach problems, tourettes symptoms. Can I deduct what all of us use??

Thanks so much for your help in this matter. Let me know if you need any other info.

Heidi

My weight loss story - how I did it, kept it off and helped others lose over 600 pounds this past year. http://greatfitnetwork.googlepages.com/healthyideas

Created By: greatfit

Re: Income Tax Season Is Here

Fri, 02 Feb 2007 01:02:25 GMT

Congratulations on losing the weight and inches. You are asking some "creative" tax questions. First of all, any income received on the sales is taxable. Any expenses to obtain that income is deductable, including mileage, postage, etc.. As far as your own personal weight situation; that is a fine line in which you might have to challenge the IRS with. If you were an actress and your income was dependant on your body, face, etc. - you would be able to write things like that off. However, I don't think you need to be "skinny" to sell those shakes (I am sure it helps to show what it can do for you). You might want to talk to your doctor and have him/her prescribe it to you on a prescription and then write it off on a Schedule A as a medical expense, which your family members could definitely do based on their medical needs.

I am sure there are folks in this forum, who are more aggressive and will tell you to write it off anyway and see what the IRS does with it. Check the publication that deals with all the expenses that are deductable. http://www.irs.gov and search on self employment, home business or something simlar.

Created By: Fransuccess

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 01:05:08 GMT

Hello Glen:

Tax time is always fun for me. It is a wonderful time of every ones life here in America....right......believe that and I have a bridge I want to seel you.

okay, question ....

It has been said that there is a paragraph in the tax laws that has gone unnoticed for ages, i.e.,

" what ever one does to maintain and or retain gainful employment is tax deductable "...

would that be a true statement...and please....in laymans terms.....:)

Joe Buccheri

Created By: 321151

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 01:07:25 GMT

GLEN:

VERNONE BROWNE HERE. JOE AND I HAVE JOINED YOU TO DISCUSS BUSINESS RIHT OFFS AND WHICH APPLY TO ENTERTAINMENT AND THE MEDIA

THANK YOU

Created By: 321151

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 01:08:32 GMT

Why not list everything people should save receipts for to itemize and things you can write off when you work from home. I know almost all of these, but I am sure that a lot of people don't. Tom :o)
Created By: scubapro48

Re: Income Tax Season Is Here

Fri, 02 Feb 2007 01:06:47 GMT

OK Guys - Below are some publications and forms needed for your home and other businesses.

Publications and Forms for the Self-Employed

Publications

Publication 15, Circular E, Employer's Tax Guide
Publication 15-A, Employer's Supplemental Tax Guide
Publication 225, Farmer's Tax Guide
Publication 334, Tax Guide for Small Business
Publication 463, Travel, Entertainment, Gift, and Car Expenses
Publication 535, Business Expenses
Publication 541, Partnerships
Publication 587, Business Use of Your Home (Including Use by Day-Care Providers)

Forms

Form 1040, U.S. Individual Income Tax Return
Schedule C (Form 1040), Profit or Loss from Business
Schedule C-EZ (Form 1040), Net Profit from Business
Schedule F (Form 1040), Profit or Loss from Farming
Schedule K-1 (Form 1065), Partner's Share of Income, Credits, Deductions, etc.
Schedule K-1 (Form 1065-B), Partner's Share of Income (Loss) from an Electing Large Partnership
Schedule SE (Form 1040), Self-Employment Tax

Created By: Fransuccess

Re: Income Tax Season Is Here

Mon, 19 Feb 2007 18:28:45 GMT

Hi guys,

Here is a great article from the Wall Street Journal today:

Starting a Biz Expands
Deduction Possibilities

By JENNIFER OPENSHAW
From MarketWatch

If you are an employee, you have little control over your tax destiny. Starting your own small business could change that a lot.

As a salaried employee you can play with 401(k) deferrals, cafeteria plans or maybe a health savings account or some other retirement plan if you qualify. Owning a rental property might also help. Other than that, you're pretty much locked in.

But here's a secret -- and believe me, I know from experience: If you start a legitimate business, even a small one, the new tax levers you'll get can really work to your advantage.

Why? Small business and entrepreneurship are part of the American Dream, and Congress wants to help out. Make no mistake -- their real hope and desire is that some of those small businesses become big ones that hire lots of people and generate more tax revenue down the road.

Upshot: you might be surprised at what you, as business owner, can write off.

Here's how it works. With a "Schedule C" business, named for the tax form used to account for it, all legitimate costs of doing business are fair game to be written off. Now, especially if your business is home-based, the natural commingling of personal and business expenses opens new possibilities. A few examples:

• Operating expenses and supplies. Anything purchased to help in your trade counts. As a part-time business or marketing consultant, or even a real estate agent, costs of a Wall Street Journal or relevant magazine subscription can be deducted. Or, as a weekend wedding photographer, you buy a ladder for better shooting angles. That counts too -- even if you also use it to remove leaves from your gutters.

• Travel. Depending on your business, travel may be deductible. Attend a conference or meet with a client -- and take the family along. Write off your individual expenses -- and since you'll need a hotel and rental car whether you're one or four, the family shares in the subsidy.

• Vehicles.It's hard to write off an entire vehicle, but you can take the mileage deduction, currently 44 cents a mile, for legitimate business activities. Combine personal trips with that business purpose -- i.e. go to the post office and make other stops on the way, the whole trip counts. Ditto for that city trip to meet a client.

• Home office. You need to do business somewhere, and if that somewhere is a separate room in your home you can deduct costs to outfit that room, plus a prorated portion of all home expenses. So if your office is 10% of your home and you spend $5,000 to repave the driveway, write off $500.

• Other facilities. You have business records and computer backups that need to be stored somewhere. So rent a storage unit -- and if Grandma's old dining table ends up in there too, it still counts.

For those with a family and especially children old enough to perform business tasks:

• Hire the kids. Your 12-year-old computer whiz could be a tax bonanza. Hire him or her to install software, back up computers or produce DVDs of your work. Pay a reasonable wage and expense it with no worries so long as the dependent's earned income stays under the standard deduction (currently $5,350). Sweeping floors or other more traditional pursuits also qualify. And don't forget Grandma and other relatives -- their deductible wages also stay in the family.

• Fund an IRA. Extending the "kiddie" theme, instead of paying cash, you can fund their IRA. You get the deduction and they get off on the right foot financially.

Now, a caution: none of this is automatic. You must be prepared to justify expenses. This means good record-keeping. Special rules for vehicles, home offices and other items require familiarity. You'll have to allocate business use of some items like computers. If you use a PC to invoice once a month, and Junior plays "World of Warcraft" the rest of the time, be careful.

Having a Schedule C return makes you two to three times more likely to be audited. Enough said.

Is it really a business?

Start a business, and write off some of your life. Without earning one thin dime. Is that really possible?

Not quite. Just having receipts and records won't do it, especially if you're reporting a loss. Congress is no fool on this one -- everyone would start a business if it never had to be profitable.

So the rules, known as "hobby business" rules, stipulate that to write off business expenses, the business must earn a profit -- or at least have reasonable profit prospects. Translation: your business must be a real business.

For most businesses, the "3 in 5" rule applies. If a business turns a profit in 3 out of 5 consecutive years -- no questions asked; you're legally presumed to have a profit motive.

So if you run a loss for three straight years, you might invite a watchful eye. But you may still win the argument -- the IRS and tax courts have given leeway to businesses that by nature take longer to achieve profits. And it helps to keep a serious, professional look -- records, permits, licenses etc. An auditor needs to see it's more than a hobby.

And that it's more than a tax dodge.

What kind of business?

So what kind of business? That's another article. Small, part time home-based businesses that involve the whole family are a good place to start. Another natural path is to do something related to your current profession. According to "Weekend Entrepreneur" co-author Michelle Anton: "The best entrepreneurial businesses grow out of your special talents, skills and interests."

It's nice to make a little extra money. And deducting the expenses, if nothing else, makes that income nearly tax free.

But you may have greater ambitions. Naturally what you start today may turn into something really big someday. This magic lamp may lift you out of the "employee" world altogether.

-- Jennifer Openshaw, author of the upcoming book, "The Millionaire Zone," is CEO of winningadvice.com. She is also host of ABC Radio's "Winning Advice with Jennifer Openshaw" and appears frequently on such shows as the CBS Early Show and Good Morning America. E-mail her at Openshaw@winningadvice.com.

Thanks,

Glen

Created By: Fransuccess

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 01:15:37 GMT

Glen

many of the same book keeping rule apply for us in Canada too - but we do not get to right off the interest on principle residences - that is why I have started a campaign here in Canada to get the Government to ammend the tax laws to make that interest a tax deductable expence - send all Canadians you know to join this movement at http://politics.clubyeah.com/doverblue

Thanks

Neil

(keep your money and donate some directly to the causes that are important to you!)

Created By: MassiveBucks

Re: Income Tax Season Is Here

Thu, 01 Feb 2007 01:37:02 GMT

Am I expecting to see income tax info applicable to the I.R.S. or C.R.A.? Amsoil Inc. issues income tax info slips for both Canadian and U.S. accounts.

Created By: 80755

Re: Income Tax Season Is Here

Fri, 02 Feb 2007 00:42:45 GMT

Sorry, but I only have US tax knowledge (I have probably done about 6 Canadian returns in my life). I guess I am reaching out to any Canadian who has tax knowledge to help us out. I know that they file during a different period than us and a lot of the time a married couple has to file two returns. Our Canadian franchisees always did a lot of returns because of that rule.
Created By: Fransuccess

Income Tax Season Is Here Discussion Topic @ AdlandPro Community

Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

OK Guys - Below are some publications and forms needed for your home and other businesses.

Publications and Forms for the Self-Employed

Re: Income Tax Season Is Here

Starting a Biz ExpandsDeduction Possibilities

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Re: Income Tax Season Is Here

Starting a Biz Expands
Deduction Possibilities