The IRS Deductions Blog

Posts Tagged ‘business’

Question: Can I do business under my own name?

I’m currently a college student and am getting back into freelance web design. I know that I need to report the income I make from it (I asked a question about it here: http://answers.yahoo.com/question/index?qid=20090617130930AATB9pX). What I need to know now is if I can do business under my own name? I would prefer to be able to deposit the checks to my personal checking account, much like my on-campus job, and not have to open a business checking account.

Also, again in regards to taxes, how exactly do I report this additional income? Do I report it as “other income” or do I have to report it as something else? And how do I include expense deductions (cell phone, computer, mileage, etc)?

Answer: In the U.S. you can do exactly this (although there may be better ways to go about it).

You would be starting a sole proprietorship. The only start-up requirements would be any business licensing that may need to be completed in your state.

Under a sole proprietorship you can legally co-mingle all of the assets of the business with your personal items (all though this may not be advisable, simply for clarity sake).

You will want to maintain some semblance of order, for easier tax preparation, because, as you mention you will want to be able to itemize your Tax Deductions for maximum value

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Proposed procedures for simplifying employer-provided cell phone substantiation rules.: An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on November 1, 2009. The length of the article is 1393 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Proposed procedures for simpl…

TYT – Extended Clip – May 5, 2011

Question: Two unmarried homeowner’s deduction for mortgage interest…?

Hi-
My fiancee and I purchased a home last year. As an unmarried couple, we file separate tax returns. This year, I claimed the standard deduction on my taxes. My fiancee is looking to fill out the itemized deduction section on her taxes which includes interest paid for our mortgage. Her name (and social security number) is listed on the mortgage interest statement from the bank. QUESTION: Since she is itemizing deductions and the interest statement is in her name, can she claim the full amount of interest on our property as a deduction? Recall that I already took the standard deduction myself. Thanks for your help. References to IRS pubs. are greatly appreciated.

Answer: Publication 936, home mortgage interest deduction is what you need to research. As long as the home mortgage interest statement has her SSN on it, you shouldn’t have a problem. It doesn’t matter if you used the standard deduction or not. It would matter if you were married and filed separate returns, because if one itemizes the other must also itemize. Don’t forget to claim property taxes, points paid during the year, and the first time homebuyers credit if applicable,

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Taking Control of Your Taxes – Topic #46 – Big Income tax mistakes you want to avoid

Big Income tax mistakes you want to avoid The problem with IRS tax code is two folds. It’s so convoluted with variations and nuances that defy logic It changes every . . .

Senate Session 2011-06-14 (16:44:05-17:46:13)

Question: Is it better to buy a new car with a home equity loan or cash? Mortgage interest is tax deductible.?

Answer: If you have cash to buy the car then pay cash. If you take out a home equity loan to buy the car then you will be paying interest. You will pay more interest on the loan then you would be earning on the cash if you have it in savings. You’ll also pay more interest than what you would save on your taxes. Mortgage interest is only deductible if you itemize deductions. Do you normally itemize or do you take the standard deduction? I just don’t see that it would be smart to use a home equity loan to buy a car.

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News in brief

Here are a selection of brief news items from this week’s paper edition, and possibly a few news briefs that didn’t make it in the paper.

Payless Car Sales in Mesa Red Tag Event

Question: What is the typical amount for standard deduction on sales tax?

Im trying to do my taxes and I had no major purchases, so I took the standard deduction….it seems hight. I just want to make sure im doing it right. Thanks!

Answer: If you use the table in the Schedule A instructions the IRS will never question it.

If you can prove that you paid more than the table amount then you can claim whatever you can prove that you paid.

In addition if you use the table amount and also had a big-ticket purchase like a car, boat, RV, airplane, etc., you can add the tax paid for that to the table amount as long as you have proof of how much was paid.

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FASB proposed guidance on the AJCA.(Financial Accounting Standards Board, American Jobs Creation Act of 2004): An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on February 1, 2005. The length of the article is 505 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTit…

Auditor guidelines on business travel and meal per diems after Rev. Rul. 2006-56.: An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by Thomson Gale on June 1, 2007. The length of the article is 631 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Auditor guideli…

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Tax the rich? Good idea, but tried before: Doesn’t work

Suppose you are a conscientious social planner. You are confident in your ability to do good. Alas, you need money to pay for your plans. You decide to meet your need for revenue by raising taxes. But how? You want to be careful to avoid any tax that negatively affects working class men and women – the very people you want to help. You think hard and come up with the perfect solution: a yacht …

Question: Just was rear ended and smushed between 2 cars, car looks totalled. Should I work directly with her insurance?

Or just go through mine. It was 100% her fault, but I don’t know if my premium will go up if I work through my insurance, even though I wasn’t at fault. Also, I will need loaner car and possibly medical care, I just am not sure what to do. I would have to pay a deductible but would most likely get it back. Anyone in the business have some answers for me?

Answer: Is this a 3 car accident??? If so, you definitely need to contact YOUR insurance company. If as you say, I was rear ended and smashed between 2 cars, means you were in the middle and the other insurance company may believe that you are also responsible for the car in front of you;;;;;;;;;;

Your auto policy most likely has medical payment and/or PIP coverage, which means it will pay for any medical care medically necessary due to an accident. Even if proven that the guy behind you is totally at fault, THEY WILL NOT PAY FOR YOUR MEDICAL BILLS, but will reimburse you after you are done treating with a pain/suffering settlement which could be months away from now.

Anything YOUR COMPANY PAYS, including your deductible, YOUR insurance company will go after the at fault party for reimbursement since they will have a “vested interest”.

Call your insurance company and they will explain the procedures and your rights.

good luck

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Credit Scores May be Factored Into Car Insurance Rates, Reports Edmunds.com

Ignoring outstanding bills could raise your car insurance premiums, while paying them off may help you secure a lower rate, reports Edmunds.com, the premier online resource for automotive information.

How to Buy Car Insurance