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Seven Key Tax Deductions for the Self EmployedDaniel Lamaute As a sole proprietor, it*s wise to familiarize yourself with the some key deductions that may reduce your tax bill for 2004. Small-business consultants generally recommend that you hire an accountant to prepare your tax returns, payroll and financial statements. But you should also meet with your accountant well before the year-end rush to discuss such matters as tax planning, and record keeping for tax deductions. Seven common small business tax deductions: 1. Employee Benefit Plans - You may deduct contributions to employee benefit plans such as health insurance plans and retirement plans. Depending on your circumstances the maximum contribution that you may deduct per employee in a qualified retirement plan can go up to: $100,000 or more For a Defined Benefit Plan $44,000 For a 401k plan $41,000 For a SEP-IRA or Keogh 2. Automobile Expenses- You can elect to deduct the actual expenses incurred including gas, oil, tires, repairs, insurance, depreciation, and rent or lease payments for the business-related portion of your car or truck expenses, or simply take the 2004 standard mileage rate of 37.5 cents per business mile. 3. Taxes - You may deduct Social Security and Medicaid taxes paid to match required withholdings on employee wages, federal unemployment taxes, sales taxes and real estate or personal property taxes paid on business assets. 4. Home Office - Depending on whether you use your home or other real estate for business purposes, you may deduct some or all of any mortgage interest paid, as well as some or all of the maintenance and repair expenses associated with the property. The cost of utilities and business supplies associated with business use are also deductible. 5. Depreciation - Depreciation may be taken on passenger cars, equipment used for entertainment or recreational purposes i.e., photographic equipment, cell phones and computers, as long as these items are used solely for the business. 6. Professional Fees - You can deduct professional fees, such as those paid to a lawyer or accountant. 7. Meals and Entertainment - You may deduct 50 percent of meal and entertainment expenses directly associated with the conduct of your business. Remember to keep on file the records and documentation necessary to substantiate all of your deductions.
| ![]() | ![]() | ![]() | RELATED ARTICLES Common Sources of Financing for Small Business The choice of financing is an important determinant of whether a product reaches the market, or whether an existing business can survive. The choice of financing is an important part of being an entrepreneur and business owner, and the ability to raise cash when you have no or limited history takes skill and creativity. There are a number of sources of financing. The suitability of the alternatives depends on what stage you are at, and will change as the company matures from stage to stage. The following outlines the most typical forms available. How Much Rent is Too Much Rent You want what every apartment renter wants: the most comfortable surroundings you can get for the lowest possible monthly rent. Some of todays newly constructed apartment communities have takenluxury to an entirely new level. Some complexes have gas fireplaces, TV monitors by the front door, drive-through mail service, and office equipment for their tenants, among other creature comforts. Every renter has to consider the importance of amenities like these. Are they important enough to you to merit a rent increase of perhaps $200 more than the rent you pay now, at a modest yet affordable complex While some of us consider an apartment as just a place to hang ones hat, others place a premium on home surroundings. But how do you determine how much you can stretch your budget -- without ending up in the poorhouse in the process My Own Online Business AfterA Divorce and Almost Bankruptcy When I got divorced, I didnt know how I was going to be able to cope with my financial responsibilities which included mortgage, car, my kidss private school plus all the other expenses related to having a family without a husbands salary. Find the best Mortgage Rate for you Most people tend to take out a mortgage, then forget about it. The monthly payments go out from their accounts every month, but they probably couldnt tell you what the interest rate was if you asked! This is slack financial policy - it is easy to make sure you always have the best mortgage rate, and therefore pay the least interest. And believe me, over the years, even a fraction of a percent reduction in interest rates means big savings! Growing Faster Than Your Cash Flow Let Factoring Fund Your Next Expansion! Why wait weeks or months to get paid by your clients when you can access your money in a matter of days by factoring your invoices.When a business factors their invoices, they are allowing a third party to purchase their invoices at a discount price.This discount is considered the third party�s fee. Dream House Can Be A Reality NC�For many Canadians who have only dreamt of buying a home, it can now become a reality. While the actual dream may differ�a house with a big back yard for gardening, or a condo in the sky with a great view of the city�buying any home can be an important step for couples building a life together, or for singles looking for a bit of security. Home ownership often represents the largest investment in their lives, leaving some first-time buyers asking "where do I begin" Credit Report And Correction Techniques The three major credit bureaus, Experian, Equifax and Trans Union are similar and feature a "Credit Score", which is created from credit report data submitted to them about you. Their report includes where you live, your bill-paying habits, and bankruptcy and arrest information. The information compiled by them is used to determine whether you would be a good borrower. It may also be used by a business to decide whether you would be a good employee. BEAP Is Creating A Substantial Income There are currently over 52 million active mortgages in the United States today, and only 2% of these mortgage holders are aware of the savings created by Biweekly Equity Acceleration Programs BEAP. This dilemma poses a thrilling opportunity for entrepreneurs seeking a business venture that can create a substantial income stream. How To Simplify Your Real Estate Buying/Selling Experience Today�s real estate consumer has a lot to consider during the sale or purchase of a home.Be it waiting for the right buyer/seller, mortgage rates, or the moving truck, the experience can take a bit of patience on the part of the consumer.With this in mind, it is incumbent upon real estate brokers/agents/firms to institute services that will the buying/selling process hassle-free. Mortgage Prepayment Penalties - Just Say No One of the most common terms found in a new home loan is a prepayment penalty. This type of penalty says that if the borrower pays off the loan early, commonly during the first five years of the loan, then the borrower will be responsible for paying an additional amount of money, typically about six months interest on 80% of the mortgage balance. Sub-prime market loans will typically carry prepayment penalties more than standard mortgage loans. How Creditors Measure Your Credit Rating Creditors will measure your credit rating based on the following three main things.CapacityCollateralCharacter Where Can I Get a Home LoanHere Are The Top 5 Mortgage Lending Institutions There are hundreds of sources for home loans online and right in your neighborhood.Banks, Credit Unions,Mortgage Bankers, Government Agencies and Private Sellers all offer different sources of financing for anyone shopping for a mortgage. How to Avoid Credit Card Late Fees Everyone hates late fees and being late will cost you dearly these days. For some credit cards today, if you are late, you will have to shell out as much as $40 each time. This can put a nice sized hole in your pocket really quick. Credit Damage: Getting Compensated for Your Loss Until recently lawyers for victims of credit damage had little possibility to collect for damages beyond medical treatment, lost wages and property loss. Insurance companies threw up their hands in sympathy, claiming victims can only be compensated for what can be measured � tangible goods and services. But, what happens when the victim has lost considerable time from work, the family bank is broke and monthly payments on mortgages, car loans and credit cards payments are missedRegardless of the haggling between lawyers and insurance companies, it�s the credit victim who ends up having to live with a bad credit rating. Bankers in Denial Denial is a ubiquitous psychological defense mechanism. It involves the repression of bad news, unpleasant information, and anxiety-inducing experiences. Judging by the German press, the country is in a state of denial regarding the waning health of its economy and the dwindling fortunes of its financial system. Ten Steps To Building A Good Credit History Are you thinking of buying a house Do you want to buy a new car to replace that old wreck Trying to get insurance on you home, auto, or life In each of these situations, what’s on your credit report will determine if you can get a loan or insurance and what rates you’ll have to pay. How to Build a Real Estate Investing Power Team As you continue to read about real estate investing, you will no doubt come across the term power team. What is this power team A power team is a group of people without whom successful real estate investing becomes very difficult, if not impossible. Included in a power team are at least one real estate agent, a mortgage broker, and a real estate lawyer, all of whom will have experience in creative real estate investing. Like It Or Not, You Have A Score To Settle Part 1 Just when most people finish with school and can stop worrying about test scores, there�s a new kind of scoring that enters the picture. It�s called credit scoring. And, its impact on your financial future can mean more to you than a college degree. Budgeting For Prosperity Budgeting For ProsperitySeven Steps to Follow To Achieve Financial Freedom More Business for Sellers, Builders Many of us thought that by now the real estate market�s favor would have swung from buyers to sellers, but that does not appear to be the case.With summer coming to a close, some would argue that a solid home buyer in today�s flat real estate market is the commodity of choice. ![]() |
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