This question is for people who own their own business, in particular homebusinesses like consulting or web design. What kind of deductions do you file for? Business meals, mortgage/rent, entertainment, DSL, etc? If you are in a partnership, is there anything different for a partnership as opopsed to a DBA or an individually-owned business? My business partner and I eat out a LOT together. SOme people tell me that 50% of that is deductible. Some say it is only deductible if clients are present. I know I should talk to an accoutant about this, and I will before the tax season is over. But I'm just curious as to what people on Clutchfans think. And yes, I know the standard drill: Nothing here is considered actual legal or accounting advice.
Its based on a ratio of what the SQ of the space you use vs. the total SQ of the home. That ratio is usually used for utility bills also.
Exactly...I deducted everything I could...I always do my own taxes and when I did some stuff on the side, I bought the Turbo Tax business edition ($80) and it asked you all the right questions for this...I don't need that anymore so I just bought the deluxe edition...
Does the tax software tell you how to prepare taxes for business partnerships? Do you recommend the software?
You must file a partnership return, Form 1065. You will get a Form K-1 from this return to use to prepare your individual return.
Woo, more good advice. Thanks! That sounds like extra trouble, though. *sigh* Guess I better do my tax stuff earlier this year.
Did you keep any books? You should have a register of money you spent and money you took in. You will have to file a partnership tax return, form 1065. You will list your income and expenses for the business, and declare your profit or loss. You can get the forms from irs.gov . Tax software is also helpful. If you have a business that is a sole-proprietorship, you will file schedule C on your individual form 1040 return. Refer to irs.gov for the list of allowable expenses.
Thanks for the advice pasox. I did keep books but they were a bit sloppy. A lot of stuff I don't have receipts for, but I do have the credit card bill to back it up (e.g. plane tickets purchased for a vegas business trip). Would that be good enough for an audit?
try www.taxactonline.com most user friendly tax software out there .....walks you through everything step by step
Never used Turbo Tax before. I can't imagine it being more user friendly though. Not sure how TT works, but taxactonline basically just starts asking you question after question and you give it answers and numbers and it does the rest for you. I mean, VERY user friendly.
Here's what the site says about record keeping for small business: http://www.irs.gov/businesses/small/article/0,,id=98551,00.html Use the search function to explore other questions and download forms. It's a useful site. In general though, I think you should expense whatever you can prove. That's only fair, really. Less than 2% of returns get an audit, anyway. Let them tell you your records aren't koesher. Don't reject declaring whatever you actually spent. EDIT - just saw codell's recommendation and will echo. We use taxACT preparer edition for some returns in my office. Not too expensive, and pretty useful. You can bypass the interviews and go straight to the forms, which I like.
i see now ...the basic version is free, which probably doesn't offer any help (just basically offering forms to fill) my advice: Go with the deluxe version for $9.95 .....thats the one that comes with all the questions and guidance i was talking about
I second getting Turbo Tax. I'm coowner in a small business and we use my house as an office. What I do is rent out 1/5th of the house to the company, S-Corporation, so I 1/5th of my bills covered. Since I rent it out I also get to write off some of my bills too as a business expense. Turbo Tax helped me figure all of that out. Also very important. Save Your Receipts!
