Your Home Based Business Tax Deductions
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A big advantage of
working from home is the tax benefits of operating a home based business. Working from home Allows you to deduct portions of bills that you are already paying to live there.
You can deduct home expenses
if you actually work in your home. It is easiest to do this if you have a room set aside for your business. Measure out how big that room is in proportion to the house, and you can deduct expenses using that percentage.
For example, if your place of doing business takes up 5% of your house, you can deduct 5% of your heating expenses for the days you work. (In other words, if you do not work weekends, you can not deduct for weekends.)
You can deduct items such as mortgage interest (though not your mortgage itself), electricity, telephone, insurance, and expenses for maintenance and repair. In general, you can deduct the portion of expenses that directly Relates to your business.
You can deduct costs for your internet service provider in proportion to the amount you use it for your business, too. If it’s used completely for business you can deduct it all, but be certain before you do this that you are not using it for other reasons.
Having a CPA do your taxes for you has major benefits. They have computer software made up by tax pros and former IRS workers that you would not ever be able to use unless you went through lots of accounting training.
everything working 100% honest with your CPA about. If you are called in for an audit your CPA will tell you to say nothing but your name and your CPA does all the talking. The IRS has to find mistakes not you. If a CPA does your tax deductions you will get you would never know to take and your CPA will therefore take away deductions you can not legitimately take.
A CPA will cost you more but will get you much more back. Tax filings done by CPAs are far less likely to be called in for audits because the IRS knows the CPA’s reputation is at stake with every tax form filled out and so the CPA will be very careful that every little detail is done correctly.
Keep a separate notebook
for tax deductions on each page and make a heading for all possible deductions like advertising, supplies, repair parts, phone, computer, etc. and write them down and save ALL your receipts in a separate large envelope. Write your deductions in this notebook, everyday happen, as they. Remember, your tax preparation is a daily, year round effort and is an important part of your business.
Write everything in your notebook that could be a deduction and then at the end of the year let your CPA decide what is and is not a deduction. He or she knows and you do not. It is their job to know. This way you will not miss out on any deductions you do not know for sure on and you will not take any deductions you do not have coming. Pretty neat huh?
You will get a lot bigger income tax refund this way and have a clear conscience you did all the right things and you will not have any worries about a scary IRS audit. Talk over with your CPA what he thinks about the way you are keeping records and learn from him or her better ways to do it. They will usually have valuable tips for you to help you run your business better. This chit chat at the end of your tax preparation is invaluable to you.
The tax benefits of operating a home based business enable you to deduct things you would otherwise be paying in full. If you are considering a business from home, it’s a good way to lower your costs. This is just one more advantage of working from home.Source:http://www.irs.gov/faqs/faq-kw82.html Plus my own life experience of business tax over 40 years
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Question by AlphaNomega : Employee Compensation while on salary? I am working at my first job and it’s as an administrative assistant on salary (been 3 months now). My bosses bought the commercial building we work in and instead of hiring a building manager, he had me do the building management (maybe to save them money?) As well as being an administrative assistant for their business (engineering firm). Now, the accountant is fired, and I am having to do some of his work as well. I am working LONG hours for all three positions at once but am on salary. However, being a “building manager” and an “accountant” is not part of the original job description when I signed the papers for a salaried Adman / hr Lastly, they have not formally ackowledged me as a building manager or accounting assistant. I can not leave the job now considering it will look bad on my resume as possibly “unsteady work history. Is there any legal issues in this situation? Any rights I should be aware of? Anything I can do to improve on what I see as unfair situation? More resources at Bookkeeping Services of Charlotte, NC Best answer:
Answer by danny14551 This article was published at Bookkeeping Services of Charlotte, NC Give your answer to this question below!
They might be taking advantage of you, but it is not illegal. You could try talking to your bosses about it, but it is not unusual for an administrative assistant to do many other jobs around the office. Causing too must of an uproar about it could cost you your job.
Is Hiring A Payroll Service Providers Right for Your Business?
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outsourcing particular business tasks can enable you to free up resources and energy to focus on your core competencies. Payroll is an important function and in all likelihood it makes sense to outsource payroll administration rather than hire in-house resources and dedicate them Solely to the function. Payroll companies help you organize your payroll, adhere to policies and procedures, and employees get paid on time.
To stay on top of your tax obligations is reason enough for your company to consider using a payroll provider. Payroll administration warrants attention to detail and even the smallest indiscretion can attract heavy penalties from the tax authority of your country. In the U.S., the IRS has a history of levying heavy fines on small businesses for even the smallest transgression. Recently released statistics show that one out of every three small businesses is penalized in some way for not complying with tax laws.
Why should you outsource payroll processing?
If you company is large enough, you may choose to conduct payroll functions in-house but be prepared to hire at least a couple of employees dedicated to this function. You will also have to allocate resources to continuously train staff in use of your payroll and accounting software to keep up with the frequently shifting state and federal tax laws. So if you are a growing company that is continuously adding new employees, teams and locations, managing payroll is going to be quite a challenge. Do you really want to get distracted from the core functions of your business by administering payroll yourself?
Payroll service providers are experts in what they do and have economies of scale since they administer payroll for many other companies. More than likely, they will deliver to your company payroll services cheaper and more efficiently that what you can do yourself.
What Companies Provide Payroll Services Thurs
Payroll companies provide various services. The following are the most common:
* Calculating pay checks for each employee
* Addressing tax obligations on a local, state, and federal level
* Printing and delivering checks
* Providing management reports
* Tracking employee benefits information
* Automatic check signatures
* Providing direct deposit
* Processing W-2 forms
* Processing 401k plans and mutual fund
* Addressing needs for your company tax and providing tax preparation
How to choose a payroll service?
Ask for quotes from several companies before making a final decision. An easy way marketplace to request quotes from multiple providers is to go to a B2B. Keep the following in mind as you decide on the provider.
* Can they provide accurate payroll service without any mistakes in employee’s pay or providing tax information to the government? Ask for history of efficiency.
* An occasional mistake is acceptable but how quickly can they correct it. If the payroll service provider is overstretched, they may not have the resources to quickly provide the remedy.
* Is the payroll system providers and software compatible with your own operating systems? Would it be possible to transfer data to and from your business easily?
* Are the references flawless? Excellent customer service to business owners and its employees is important.
* How many clients is the payroll provider serving? Large number of clients may indicate a successful service but attrition in the past few months may indicate deteriorating quality. Does the provider have adequate resources to serve your business?
* Is the pricing competitive? Some companies may bait you with low basic fees and charge heavily for extras. Ask for an all inclusive package to compare prices.
Once you decide on a payroll provider, scrutinize the contract very carefully for any hidden fees or charges that may kick in after a few months of service.
Check the first few pay checks very carefully for any mistakes. It is better to uncover the issues early enough before they get compounded and more difficult to fix.
Hiring a payroll provider is an important decision for your business. It is tough to easily switch a payroll provider if you make the wrong decision. Make sure you adequately research all possibilities before making a final decision.
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