The IRS Deductions Blog

Posts Tagged ‘federal’

Items on Amazon Right Now for Tax Deductible Mileage Rate 2009:

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

Items on Amazon Right Now for Tax Deduction Cell Phone:

TYT – Extended Clip – May 5, 2011

Question: Is an artifical lawn a tax deductible expense?

We live in the desert in AZ & for energy efficiency & due to the extreme heat in the summer, we installed a small artifical lawn instead of real grass. Even though it’s fairly small, it was a big expense. It should pay for itself in the long run, by saving in watering expenses & not having to buy a mower & other lawn maintenance expenses. Does this qualify as a energy-efficient home improvement tax deduction or any other type of tax deduction? I cannot find any information on this online. Thanks.

Answer: Good question. I am pretty sure energy efficient mean improvements that either produce or use less electricty. I do not believe you can deduct the cost of the lawn.

Home improvements are added to your basis in the property and then reduce the gain on the sale when you sell the home.

You might try www.irs.gov to see if you can find the answer. You can call the IRS at (800) 829-1040. (Long wait on hold this time of year) Or, you can write to the IRS and ask your question. Writing is what I would do.

If you have not received an answer by the time you file your return. File with out deducting the lawn. If the IRS writes back and says you can deduct the lawn then file Form 1040X.

Items on Amazon Right Now for Tax Deduction For Home Improvement:

Pulaski Financial Reports Improved Linked-Quarter Earnings

Pulaski Financial Corp. today reported net income for the quarter ended June 30, 2011 of $1.7 million, or $0.11 per diluted common share, compared with net income of $1.1 million, or $0.05 per diluted common share, for the quarter ended March 31, 2011 and net income of $3.2 million, or $0.25 per diluted common share, for the June 2010 quarter.

William Raabe Tax Tips Part 2

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,

Items on Amazon Right Now for Irs Standard Deduction Amount:

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.

Items on Amazon Right Now for Car Loan Deductible:

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