Deductions for Businesses

Domestic Production Deduction

If your business is engaged in a qualifying production activity you may be able to take a tax deduction for your U.S. based business activities.

Organizational and Start Up Costs

Have you just started a new business? Did you know expenses incurred before a business begins operations are not allowed as current deductions?

Business or Hobby?

It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take.

Business Eligibility for Schedule C-EZ

Your business may have become eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit and loss on your federal income tax return, according to the IRS.

Deductible Home Offices

Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

Filing Deadline and Payment Options

If you’re trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies here. If you find you need more time to finish your return, you can get a five or six month extension of time to file using Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. And if you have trouble paying your tax bill, the IRS has several payment options available.

Refund, Where’s My Refund?

Are you expecting a tax refund from the Internal Revenue Service this year? If you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return. If you file your return electronically, your refund should be issued in about half the time it would take if you filed a paper return even faster when you choose direct deposit.

Your Appeal Rights

Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.

Information About IRS Notices

It’s a moment any taxpayer dreads. An envelope arrives from the IRS and it’s not a refund check. But don’t panic. Many IRS letters can be dealt with simply and painlessly.

Charitable Contributions

When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction for your corporation or your personal taxes if you are a member of a flow-through business entity and itemize deductions on IRS Form 1040, Schedule A.

Refinancing Your Home

Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans.

Credit for the Elderly or Disabled

You may be able to take the Credit for the Elderly or the Disabled if you were age 65 or older at the end of last year, or if you are retired on permanent and total disability, according to the IRS.

Selling Your Home

If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return.

Foreign Income

With more and more United States citizens earning money from foreign sources, the IRS reminds people that they must report all such income on their tax return, unless it is exempt under federal law. U.S. citizens are taxed on their worldwide income.

Deductible Taxes

Did you know that you may be able to deduct certain taxes on your federal income tax return? The IRS says you can if you file Form 1040 and itemize deductions on Schedule A. Deductions decrease the amount of income subject to taxation.

Gift Giving

If you gave any one person gifts valued at more than $13,000, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift.

Marriage or Divorce

Newlyweds and the recently divorced should make sure that names on their tax returns match those registered with the Social Security Administration (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could unexpectedly increase a tax bill or reduce the size of any refund.

Deduction of State and Local Taxes

If you itemize your taxes, you may choose to deduct state and local sales taxes instead of state and local income taxes. The American Jobs Creation Act of 2004 gives taxpayers this option for this year’s tax returns.

Filing Deadline and Payment Options

If you’re trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies here. If you find you need more time to finish your return, you can get a six month extension of time to file using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. And if you have trouble paying your tax bill, the IRS has several payment options available.

Ten Ways to Avoid Problems at Tax Time

Looking for ways to avoid the last-minute rush for doing your taxes? The IRS offers these tips.

Refund, Where’s My Refund?

Are you expecting a tax refund from the Internal Revenue Service this year? If you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return. If you file your return electronically, your refund should be issued in about half the time it would take if you filed a paper return even faster when you choose direct deposit.

The Tax Advocate Service, Provided by the IRS

Have you tried everything to resolve a tax problem with the IRS but are still experiencing delays? Are you facing what you consider to be an economic burden or hardship due to IRS collection or other actions? If so, you can seek the assistance of the Taxpayer Advocate Service.

Tips and Taxes

Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income, advises the IRS.

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