Home Business Tax Tips

If you have recently started an Internet or home business, your probably a little intimidated by having to submit a tax return and the possibilities of being audited. Simply follow these guidelines and rest assured that filing your next tax return will go smoothly.

Get yourself an accounting ledger booklet

The first thing that you need to do at the beginning of every year is purchase yourself a accounting ledger booklet. These can be found at your local office supply store and can be found for under $10. You can deduct your millage and the accounting legder also.

Keep a millage tracking sheet in your car

Each year I make myself a simple spreadsheet that I keep in the glove compartment of my car. Each time that I need to get office supplies, or I go to the post office to mail flyers, I write my beginning and ending millage down on the spreadsheet. At the end of the year, I just transfer the millage over to my accounting ledger.

Keep track of your Utilities

If you have a room in your home that is used only for your internet business and nothing else, you will be able to deduct a portion of your utilities. I especially like this because I have to have these things anyway with or without the internet business and now they are tax deductible. Everything from gas, electricity, long distance and garbage pick-up are allowable deductions. Be sure that you keep your payment receipts in your accounting ledger.

Other Business Expenses

You will also be able to deduct any payments to your internet service provider. If you have a website you will be able to deduct your domain name and hosting plan expenses. Other deductable items could be anything you have purchased to maintain your business such as: fax machines, copy machines, scanners, ink cartridges, desks, chairs, phones, pencils, paper, etc.

Advertising / Membership Fees

If you pay for advertising or your internet business has a membership fee, these expenses can be deducted also.

Labor Expenses

Many home business owners pay members of their family to help with the home business. Be sure to keep track of the wages that were paid to employees or family members.

Entertainment Expenses

I don't have too much to deduct in this category, but several times a year I will meet a potential client over dinner. Keep track of your dinner expenses, including tips...this is all deductable also.

Income

In addition to all your deductable expenses, you will also need to keep track of any money that you make with your business.

In closing, simply keep track of all your millage, utilities, office supplies, labor and income in your accounting ledger. Be sure to attach a copy of your receipts. Total up each category at the end of the year and take the entire booklet into your tax preparer.

You will find that having a home business can be hassle free at tax time if you have taken the time to keep track of your expenditures and income.

Best wishes for your future success and prosperity!

Sincerely,

About The Author

Rebecca Gilbert is the owner of a successful internet business located at: http://www.101homebusiness.org.

For more tips and articles written by Rebecca, please visit: http://www.101homebusiness.org/home_based_business_articles.html

---

Gambling Income and Expenses - Tax Requirements

Hit a big one? With more and more gambling establishments,... Read More

Furnishing Evidence in E-Tax Compliance

Self-assessment relies on taxpayers voluntarily meeting their tax obligations. This... Read More

Complaince of Tax Return in Electronic Commerce Taxation

Emerging Legal issues of Tax compliance of e-business Self-assessment system... Read More

IRS Offer-in-Compromise, Hype or Hope?

"Settle for Pennies on the Dollar! IRS debts settled for... Read More

Save Money on Taxes - Double Your Income Now With Tax Saving Tips on Deductions

Adding Your First Additional Stream of IncomeMost new wealth builders... Read More

Send Your Kids To Summer Camp and Write It Off

If you paid someone to care for a child so... Read More

10 Tax Tips to Reduce Costs and Increase Income

No one likes paying tax. Everyone understands that tax is... Read More

How To Get An Instant Pay Raise

As a gentleman was leaving my class recently, he wanted... Read More

About Income Taxes; Tidbits

1812The first attempt to impose an income tax on America... Read More

To Tax or Not to Tax - This is the Question

To tax or not to tax - this question could... Read More

Tax Secrets - How Drew Miles Helped Me

How about a Tax Tip?As we all know Taxes are... Read More

Estate Taxes - It Pays to Plan Ahead

Estate taxes. It's not enough to simply know they exist,... Read More

Tax Deduction for Alimony Payments? - Yes!

Over 50% of marriages end in divorce in the United... Read More

What to Do If You Can?t Pay Your Taxes

The end of tax filing extensions is quickly approaching. What... Read More

How to Donate Your Car to Charity and Get Tax Deduction

Donating your used car to charity is a win-win situation;... Read More

Need an Offshore Sales Office in a Tax Free Environment?

The 100 year old investment-banking firm of... Read More

How to Cut Duty Cost and Increase Profit as an Importer

Import duties continue to be significant elements in the cost... Read More

IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters

The IRS has obtained civil injunctions against more than 100... Read More

Donating Cars To Charity - New Tax Rules

On June 3, 2005, the IRS released guidance on charitable... Read More

Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Someone once remarked, "Next to being shot at and missed,... Read More

Access to E-records by Taxing Authorities: A Case for Pakistan (Part I)

Background issues of access to recordsTo assess the records at... Read More

Marriage or Divorce ? Check Your Social Security Number

Newlyweds and the recently divorced should make sure that names... Read More

Employment Taxes ? What Are They?

If you have employees, you are responsible for paying a... Read More

Requirements To Produce Tax Information (Whats Up With That?)

"What we've got here is a failure to communicate." ... Read More

How To Set Up A Tax-Saving Bookkeeping System

One of the most important, but least understood or appreciated... Read More

Tax Tips for Home-Based Business Owners

As tax time approaches, many home-based business owners begin completing... Read More

Rental Property Tax Deductions

Own residential rental properties? This article discusses how income from... Read More

Render Unto Caesar

Once a year Canadian taxpayers are required, by law, to... Read More

Car Donation: An Easy Way to Support Your Favorite Charity and Get a Tax Deduction

Most people look forward to getting their tax return, but... Read More

The Internet Tax Man Cometh

Q: I was contacted by the city tax collector to... Read More

Tax Reduction Tips

In the rush to get tax returns prepared and filed... Read More

Tax Help Secret: Avoiding the Entreprenuers Curse

Your days as an entrepreneur and businessperson are consumed with... Read More

What You Need To Know About Taxes If You?re Getting Married

It may not be high on the list of wedding... Read More