Let us create a 3D eBook for you!
Let us create a 3d Digital eBook for you! DigyCat.com

Are You An Innocent Victim of These Popular Myths?


Misconceptions, misinterpretations and just plain "untruths" are floating about income taxes. Believing them could be costing thousands of tax dollars!

Myth: A Professional Tax Preparer knows all there is to know about taxes so you don't have to know anything them.

Truth: Tax Preparer's/CPA's/Accountants are not uniformly informed about ALL tax laws. Most are able to file a personal income tax and know all the laws and how to apply them to personal income tax.

There are thousands of excellent, hard-working accountants doing a great job. And if you use a tax professional, maybe they have done everything possible to reduce your taxes. But many professional tax preparers are just tax preparers.

They may know how to prepare a tax return in their sleep. They know what numbers go on which form. But that's about all they know.

A good tax preparer is not trained in tax reduction strategies.

The only way you are assured to get the tax deductions you are entitled to, as a Home-Based Business Owner, is to become informed yourself.

Myth: You must "itemize" in order to take Home-Based Business expenses.

Truth: Many people misunderstand the terminology here.

When you "itemize" your income tax you file Form A&B and take such things as medical, home mortgage interest etc. You will only "itemize" if the total of Form A is over the standard deduction (for 2003 taxes?$4,700 single, $9,500 married)

Some people call this filing "long form."

All taxpayers have the opportunity to itemize if it is to their advantage.

Whether you "itemize" or not has NO bearing on your Business.

Myth: You're not making a profit so there is no advantage to filing business income taxes.

Truth: This is so not true! There's many tax advantages to filing a Home-Business tax return and especially so if you are not making a profit. If you also work a job, be it part-time or full time, in addition to your Home-Based business it is especially beneficial to you to file a business tax return.

Expenses incurred in your business can be taken against your job income thus reducing your taxable dollar, which decreases your tax liability.

Myth: Because you work a full-time job your Internet Marketing Business is just a hobby.

Truth: Only another Internet Marketer can truly understand the hours and money spent on what someone else would call a "hobby"!

The rules clearly state you have a business if you meet 8 rules. Four of the most important rules to meet are:

1. Expertise of the taxpayer or his/her advisors. That would mean your expertise in Internet Marketing or those who advise you. If you're learning and actively applying what you learn to your Internet Marketing activities and have a good "handle" on this?you qualify.

2. Time and Effort the Taxpayer puts into 'running the business'. They just want to make sure you're running a real business, not just engaging in a hobby. How much "time and effort" is enough? The United States Federal Tax Court has ruled that "45 minutes a day, 4 to 5 days a week" qualifies.

I can't see anyone who is in Internet Marketing with a profit motive not qualifying here!

3. The Manner in Which the Taxpayer Carries On the Business Activity. This one is common sense. Do you conduct your business mostly on the telephone, over the Internet and in-home presentations (these are good), or mostly at the golf course, during lunches and at the pub (not so good). Just treat your business like a business.

4. Is the Primary Purpose of your activity to 'Produce a Profit," or to 'Produce Tax Write-offs'? The best way to Pass the profit-motive test, is to have a Business Plan, and That Business Plan should include a table of Income and Expense projections, clearly showing profitability at some point in the future. Note that you are not required to actually produce a profit in order to qualify for home-business tax deductions -- just to show that you have the intent to produce a profit.

If you are doing all this then there is no reason for your business to be considered a "hobby".

Myth: You must make a profit within 5 years to be considered a "business" and file Home-Business taxes.

Truth: That's a generalization. Yes, the government would like to see you make a profit within 5 years but you are not penalized for not doing so. If you are following the above 4 rules and conducting yourself as a business you have nothing to worry about. You are a business and some businesses are not profitable for a number of years.

Myth: Learning how to reduce you taxes is hard and complicated.

Truth: Average Small Business Owners have plenty of tax reduction strategies at their disposal. You just have to know what they are and how to use them.

Once you learn what deductions are allowed you will know what figures your Tax Preparer/Accountant needs and you can configure your accounting accordingly.

Myth: Accounting and tax documentation for the Home-Business is not for the do-it-yourselfer.

Truth: All Small Business Owners can easily keep their own books using any number of software programs. It is not necessary to have an accountant.

No, you will not have to learn accounting. You will just need to be able to "categorize" and record expenses and sales.

Documentation for the government is very easy if you use a pocket calendar and keep your receipts.

In just 5-10 minutes a day you can have records that will withstand any government scrutiny.

About The Author

Karin Workman is a 30-year veteran Home-Based Business Owner who specializes in Tax Preparation for Home-Based Businesses. Karin also wrote the Hot New Ecourse: "Reap the Rewards!" Designed to help you save tax dollars and put more money into YOUR pocket. The course is Free exclusively at: http://reaptherewards.businessoppsunlimited.com


MORE RESOURCES:

Taxes - Google News

This RSS feed URL is deprecated

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

Legislator: Delay paying property taxes - Peninsula Daily News


Peninsula Daily News

Legislator: Delay paying property taxes
Peninsula Daily News
It was voted Wednesday night out of the Senate Ways and Means Committee by a party-line vote of 14-10 and sent Thursday to the Rules Committee, prompting Van De Wege to send out a news release late Thursday morning suggesting that Republicans forced ...

and more »

Fed up with skyrocketing property taxes? Don't pay bill in full, say some state lawmakers - KOMO News


KOMO News

Fed up with skyrocketing property taxes? Don't pay bill in full, say some state lawmakers
KOMO News
SEATTLE - It's a plan you might never think would be endorsed by state lawmakers: don't pay your entire property tax bill in full, at least for now. Sen. Mark Mullet (D-Issaquah) and Sen. Dean Takko (D-Longview) say they have a plan to reduce ...

SC tax reform plan would increase cost of groceries, but cut sales taxes - The State


The State

SC tax reform plan would increase cost of groceries, but cut sales taxes
The State
An S.C. House panel unveiled a proposal Thursday to increase the taxes on groceries and power bills in the Palmetto State. But that panel also proposes cutting other taxes as part of a tax-reform package that House Speaker Jay Lucas says will make the ...

An old tax scam — with a troubling new twist - Washington Post


Washington Post

An old tax scam — with a troubling new twist
Washington Post
But because many more people have become aware of the telephone tax-payment trick and learned to ignore the threats, the schemers had to evolve. And the latest twist on this swindle is just pure evil. [Don't be fooled by fake IRS calls or emails]. The ...
Get your tax refund before you file? Here's why it's happening Detroit Free Press

all 58 news articles »

How will tax reform affect my refund next year? - AOL


AOL

How will tax reform affect my refund next year?
AOL
We know that you work hard for your money and often a tax refund may be the biggest check you get all year, so we're here to let you know how the new tax reform legislation may affect your tax refund next year. The new tax law is the largest piece of ...
Keep an eye on your tax planning even as bigger paychecks come your way Detroit Free Press

all 9 news articles »

Commerce Secretary Wilbur Ross, who called raising gas taxes a 'horrible idea,' says Trump is considering a hike - CNBC


CNBC

Commerce Secretary Wilbur Ross, who called raising gas taxes a 'horrible idea,' says Trump is considering a hike
CNBC
U.S. Commerce Secretary Wilbur Ross on Thursday confirmed that President Donald Trump is open to raising federal fuel taxes, saying it's logical to charge drivers for road improvements. Three years ago, Ross denounced calls to raise the gas tax, saying ...

and more »

Tech giants face new UK tax clampdown - BBC News


BBC News

Tech giants face new UK tax clampdown
BBC News
Some of the world's largest technology firms are facing hefty new bills as the UK government moves to fundamentally change the way they are taxed. Google and Facebook are braced for significant changes in the tax system after the Treasury told the BBC ...
Facebook and Google could soon have much higher taxes in the UK, report says CNBC
Tech giants face UK tax overhaul as Treasury says they must pay more Telegraph.co.uk

all 14 news articles »

5 Ways to Avoid Paying Taxes on Your Social Security Benefits - Yahoo Finance


5 Ways to Avoid Paying Taxes on Your Social Security Benefits
Yahoo Finance
If you file an individual return and your combined income is between $25,000 and $34,000, you may owe income tax on up to 50 percent of benefits. Earn more than that, and up to 85 percent of your benefits could be subject to taxes. For those filing a ...

and more »

How the standard tax deduction could cost you - USA TODAY


USA TODAY

How the standard tax deduction could cost you
USA TODAY
“I have my people do a quick little check that says, 'OK, how much did you pay in state income tax on your W-2s, how much have you paid for real estate tax and how much have you paid for mortgage interest?' If those are getting you close to that $12 ...

LargeFriends.com - the best dating site for plus-sized singles!
SuccessfulMatchCentral.com - the best dating site for plus-sized singles!

PreLaunchX

PrimeNews Domain Is For Sale - $5,000 For Enquiries eMail Us

© www.PrimeNews.biz - 2012

home | site map | links