Q: Where's my REFUND???
Q: Who's the Biggest Tax Cheat...?
A: YOU! YOU Cheat YOURSELF!
"I firmly believe that more Americans cheat themselves than cheat the
IRS by poor recordkeeping and ignorance of tax laws!" -Walt D
Tax Tip: Business Formation
BEFORE YOU ESTABLISH A SOLE PROPRIETORSHIP, PARTNERSHIP, CORPORATION, or LLC, YOU BETTER KNOW WHAT THE TAX CONSEQUENCES ARE FOR EACH TYPE OF ENTITY! THE WRONG ENTITY COULD COST YOU
Freedom has been providing tax planning advice to people forming corporations, LLCs, partnerships, etc. for almost two decades! Unfortunately, many come to us AFTER they have spent big bucks with an attorney. Although only attorneys can give you legal advice, they routinely "plead ignorant" regarding taxes and that frequently results in some major costly mistakes.
Your Freedom Advisor can help you prepare the documents you need to form a corporation, parnership, or LLC, generally for much less than Legal Zoom or other similar sources and definately much less than an attorney.
Tax Tip: Business Expenses for the Self-Employed and Homebased Business Owner
This is, by no means, a complete list of all legal business deductions available to you, but it will get you started documenting all of your expensessomething you need to do for your business anyway! Here's a list of the most common business expenses you'll list on Schedule C of your individual tax return if you have an unincorporated business:
- Advertising: Business Cards, Flyers, Yellow Pages, Coupons, etc
- Car and truck expenses (you can take the higher of actual miles driven at 55.5 cents per mile (2013) or actual expenses, including gas, oil, tires, maintenance, insurance, etc.)
- Commissions paid to salespeople, independent reps etc (1099's)
- Insurance (other than health, i.e. Disability, Liability, etc)
- Interest: Expense paid to banks for equipment or real estate loans
- Internet service provider: Yes, AOL or other provided you utilize for Biz!
- Legal and professional fees: Tax Prep, Attorneys, Ad Agencies, etc
- Office expense: Cost of Office or PMB like Mail Boxes Etc
- Pension and profit sharing plans: SIMPLE, IRA's, KEOUGHS, etc
- Postage: Stamps, packaging-shipping costs, as well as UPS, FEDEX, etc.
- Rent or Lease: Vehicles, machinery, equipment
- Repairs and maintenance to business equipment, buildings, etc.
- Supplies: Office supplies or materials necessary for Biz
- Taxes and Licenses (other than income taxes)
- Telephone: Cost of service as well as equipment (includes cell phone as well)
- Travel: Trade Shows, Conferences, Seminars, etc.
- Meals and entertainment: Keep receipts for Biz Meals
- Utilities: Pro-rated amount for home-based office
- Wages: Paid to employees (or kids if qualified)
- Other Expenses: Any other expense that doesn't fit into one of the categories above.
- Business Use of Your Home: You may qualify for this deduction provided that you use an area of your home or apartment regularly and exclusively for business. You may then write off a portion of your rent and utilities or mortgage interest and taxes, etc
Remember, KEEP RECEIPTS and DOCUMENT EVERYTHING! The more proof that you have concerning your business expenses, the easier it is to prove they are legitimate and the more you'll know the true profitability of your business.
Compact Corporate/LLC Formation
- Corporate/LLC Certificates
*State Fees Extra
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Freedom Financial Services
1557 Grand Ave. - Suite A
San Marcos, CA 92078