Some Small Business Tax problems for the Self Employed
In our country there are millions of people who are self-employed and also dreaming of having a big business. But very few are able to handle the very complicated tax issues at ease. Most of them are confused when its time for their tax return.
All the persons whether they are taking business as a hobby or providing some services to the people, everyone has to file for a tax return. You have to submit business revenue results in your individual tax return reports. Here are some guidelines and tricks you should keep in mind, if you wish to have a business.
Schedule C –Form 1040:-
You always have to report your business loss or profits in Schedule C Form 1040. The income earned from business is taxable. If you don`t withdraw any money from the business, still you have to pay taxes as an individual. If the business has confronted a loss, the loss will be deduced from the total income in case of individual tax return.
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Home Based Business :-
If you are conducting home-based business, then you can claim for tax deduction for the payments like telephone charges and other utilities. Most persons miss these opportunities of tax deduction as they are not aware of the rules of deduction.
Self-Employment Taxes :-
Self employment tax is proving a big set back for the self employed. You have to pay a hefty tax for your income from the business. You can opt for partial deduction of your self employment tax, which is not known to many person and pay extra amount tax. You can deduct half of the self-employment tax from the total income.
There are also little known deductions available like no withholding tax, health insurance deduction etc. Later we can talk about these too.
All the persons whether they are taking business as a hobby or providing some services to the people, everyone has to file for a tax return. You have to submit business revenue results in your individual tax return reports. Here are some guidelines and tricks you should keep in mind, if you wish to have a business.
Schedule C –Form 1040:-
You always have to report your business loss or profits in Schedule C Form 1040. The income earned from business is taxable. If you don`t withdraw any money from the business, still you have to pay taxes as an individual. If the business has confronted a loss, the loss will be deduced from the total income in case of individual tax return.
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Home Based Business :-
If you are conducting home-based business, then you can claim for tax deduction for the payments like telephone charges and other utilities. Most persons miss these opportunities of tax deduction as they are not aware of the rules of deduction.
Self-Employment Taxes :-
Self employment tax is proving a big set back for the self employed. You have to pay a hefty tax for your income from the business. You can opt for partial deduction of your self employment tax, which is not known to many person and pay extra amount tax. You can deduct half of the self-employment tax from the total income.
There are also little known deductions available like no withholding tax, health insurance deduction etc. Later we can talk about these too.
Categories:
Tax
hi!
ReplyDeleteyou have chosen a good topic and have given us a brief note about form-c,but we expect to have a little more explanation about form-c as well as the other taxes!
Yeah I am also thinking of writing more in detail. In future I surely will try to write on the topic. Hope to have more suggestions.
ReplyDeleteHello,
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Vikas Malviya
Hi Vikas,
ReplyDeleteChecked your blog but its in its preliminary stage, Hope to have more posts in future which will be an asset to the web world.