Learn more about keeping your business compliant with federal tax requirements.
One of the principles underlying the tax rules for deductions is that your income for the year should only be offset by those expenses that contributed to earning that income. Expenses to acquire or improve a business asset that will last longer than a year are not deductible as business expenses.
If you have employees, they may use their car for business purposes, perhaps to make sales calls, make deliveries, or pick up supplies or equipment. If this happens often enough, you may decide to reimburse the employees' expenses for using their car or to provide a company car or truck for their use. This article will help you understand the tax ramifications of either choice
No one looks forward to a tax audit, but the information in this article can help you be prepared if you do find yourself in that unpleasant situation.
If you qualify for the home office deduction, you may claim a portion of certain types of expenses that are usually not deductible by the average homeowner.
Once you've determined that you qualify for the home office deduction, you can determine the amount based upon the portion of your home used, the length time used and your expenses.
Ordinary and necessary costs you incur in running your business can be deducted from your income, which reduces the amount of tax that you will owe.
If a vehicle is used exclusively for business purposes, you may generally deduct the full cost of operating the vehicle, other than expenses attributable to commuting. If you use a vehicle for business on a part-time basis, you will have to allocate your expenses based on your business and personal use.
If you've suffered from a theft, accident, fire, flood, or some other casualty during the year, you may be able to deduct some of your unreimbursed losses. The amount depends upon whether the property was personal or business, and upon the amount of your reimbursement.
It seems obvious, but in order to be able to deduct business expenses, set up a retirement plan, and claim tax breaks allowed to business owners, you must be engaged in a "trade or business." That is, you must be engaged in an activity that is carried on for a livelihood or for profit, even if you have some unprofitable years.
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