Tax Tips For Home Business Owners

For those lucky home based business owners, I hope you kept good records this year! You've got a BOATLOAD of deductions in store!

Don't forget these deductions! As always, check with your accountant, there could be a LOT more!

Auto/vehicle expenses. (If you have advertising on your vehicle, you could even deduct part of the payment/insurance!)

Business cards/stationary

Business meals and entertainment expenses.

Business travel (did you know if you visited family two states away, gave a short presentation of your business ... you can now deduct this!)

Business Start up costs

Education

Interest payments on business credit cards

Internet access and web-related expenses

Office supplies

Phone and cell phone (business calls)

Postage/delivery charges

Publications/subscriptions

If you're involved in a MLM, the products you purchase in order to qualify for commissions

Professional services and consultants

Rent, if you have a dedicated spot in your home

Utilities

Also, deduction you want to be sure to take on your Form 1040 (not Schedule C) are:

One half of your self-employment tax amount as a deduction against total income on your form 1040.

Up to to 100% of medical insurance costs you've paid for yourself, spouse, and dependents.

Using the C-EZ Form

Anyone with net earnings of $400 or more from self-employment must file a tax return. However, if your business is new or you've had an off year, you may qualify to file a Schedule C-EZ if your business expenses were $5000 or less, you don't keep any kind of inventory, don't take a home office deduction, and don't need to file a form 4562 for depreciation and amortization.

But before you opt for the C-EZ form, you'll want to make sure your expenses don't exceed $5000. Be sure to consider if you're taking all you're entitled to.

Set Up an SEP-IRA Account

Even though 2008 is past, if you've had a good year you can still save money by setting up an SEP-IRA retirement fund account as late as when you file your tax return. This is true even if you're getting an extension. While it takes money to fund your SEP-IRA, keep in mind that what you save in taxes will pay for part of this investment, and this money will be available to you in years to come.

Choose the Right Preparation Service.

Using a tax professional has many advantages, such as saving you time and frustration. Also professionals may spot deductions you might miss and identify problems you may have, and thus more than justify their fees. You can locate a CPA specializing in small business using the CPA directory (www.cpadirectory.com) and find enrolled agents through their professional association, the National Association of Enrolled Agents (www.naea.org).

Get Your Refund Quicker

If you're expecting a refund, you're more likely to receive it quicker by filing electronically. You can file an increasing number of business tax returns and forms yourself, without the help of a tax preparer. Other advantages of filing electronically include fewer errors in processing and an electronic receipt from the IRS that acknowledges your return has been received.

To Make It Easier Next Year

Take the time to prepare for next year. Did you spend a lot of time trying to find something you needed? What filing and organizing could you do to prevent this next year? Wouldn't it be easier to enter cash expenses and download credit card transactions directly into your money management program?