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Articles from Wayne Davies | Selfgrowth.com
- 5 Questions You Must Ask Before Hiring A Good Tax Preparer - by Submitted on Feb 01, 2011 from Wayne DaviesBefore you hire someone to prepare your tax returns, you want to conduct an interview and ask several important questions. The answers to these questions will determine whether this tax preparation service is qualified to provide what you need. 1. How long have you been doing tax returns? If ...
Views: 933 - Business Tax Deductions - How to Deduct a Bad Debt - by Submitted on Feb 01, 2011 from Wayne DaviesThe purpose of this article is to answer the question: "What do I do if a customer or client doesn't pay me? Do I get to deduct the lost sale amount?" Of course, this is a common problem in any business. Oh that we never encountered a bad debt or an uncollectible account ...
Views: 1076 - How to Find the Right Tax Preparation Service for You - by Submitted on Feb 04, 2011 from Wayne DaviesWhat should you look for in a tax preparation service? Since there are so many tax preparers to choose from, it only makes sense that you know what you need before making a decision. Here are three essential qualities that any reliable tax preparation business will have: 1. Many years of ...
Views: 755 - How to Prepare Form 4562 - The Big Picture - by Submitted on Feb 04, 2011 from Wayne DaviesIf your small business is a Sole Proprietorship and you are involved with the preparation of your income tax return, you will eventually run into Form 4562, one of the most complicated tax forms on the planet, if not the universe. But do not despair, for help is on the way. The purpose of this ...
Views: 2273 - How to Prepare Form 4562 For a Sole Proprietorship - by Submitted on Feb 04, 2011 from Wayne DaviesIf you are a Sole Proprietor who purchased business equipment, and you'd like to deduct that purchase on your income tax return without breaking into a sweat, this article is for you. I'm going to show you how to properly fill out Form 4562 without getting bogged down in those complex ...
Views: 2567 - How to Prepare Form 8829 - by Submitted on Feb 04, 2011 from Wayne DaviesIf you are a Sole Proprietor with a home office, you must file Form 8829, Expenses for Business Use of Your Home. The purpose of this article is to help you prepare this form without getting a headache. This article makes three assumptions about your business: 1. Your Sole Proprietorship is ...
Views: 2547 - How to Prepare Schedule C - Part I - by Submitted on Feb 04, 2011 from Wayne DaviesAre you a Sole Proprietor and prepare your own tax return every year? Do you ever need some help with Schedule C? Get out a copy of Schedule C and let's take a look at Part I, Income. The purpose of Part I is to report your income, aka "sales" or "revenue". In other words, how much money did you ...
Views: 1070 - How to Prepare Schedule C, Part II - by Submitted on Feb 11, 2011 from Wayne DaviesDo you need help reporting expenses on your Schedule C? Are you wondering whether you've accurately captured all deductible business expenses for your Sole Proprietorship? Then this article is for you. Preparing Schedule C is an integral part of any Sole Proprietor's personal income tax ...
Views: 1273 - How to Prepare Schedule C, Part III, Cost of Goods Sold - by Submitted on Feb 11, 2011 from Wayne DaviesIf you are a Sole Proprietor, you must file Schedule C, Profit or Loss From Business (Sole Proprietorship). And if you are a Sole Proprietor whose business involves sale of a product, you must complete Part III of Schedule C, Cost of Goods Sold. The purpose of this article is to help you with ...
Views: 14823 - How to Prepare Schedule C, Part IV - by Submitted on Feb 11, 2011 from Wayne DaviesIf you are a Sole Proprietor who is deducting Car and truck expenses on Schedule C, Line 9, you may be required to complete Part IV of Schedule C, "Information on Your Vehicle." The purpose of this article is to explain how to complete this section of Schedule C. Schedule C, Part IV begins on ...
Views: 7789 - How to Prepare Schedule C, Part V - by Submitted on Feb 11, 2011 from Wayne DaviesFor Sole Proprietors, Schedule C can be either your best friend or your biggest nightmare. There are parts of this two-page form that you will learn to love or grow to hate. There are five parts to Schedule C, and the purpose of this article is to help you with Part V, Other Expenses - hopefully ...
Views: 2990 - How to Prepare the Easy Part of Schedule C - by Submitted on Feb 11, 2011 from Wayne DaviesAre you a Sole Proprietor who faces the daunting task of filling out Schedule C every year? If you break out into a sweat just thinking about, you came to the right place. To get the most out of this article, get a copy of Schedule C and have it in front of you as you read on. You can open up ...
Views: 944 - How To Reduce The Chance Of An Audit By Over 50 Percent - by Submitted on Feb 11, 2011 from Wayne DaviesPerhaps you've been thinking about making a change in your Choice of Entity. Maybe you've been asking, "What type of Business Entity should my business be?" By "Business Entity", I mean the legal structure of your business, and there are basically five from which to choose: Sole ...
Views: 794 - Last Minute Tax Tips - How to File an Extension For Your Personal Tax Return - by Submitted on Feb 11, 2011 from Wayne DaviesDo you need more time to prepare your personal tax return? Look no further than Form 4868. And if you need help completing Form 4868, look no further than this article. Here are five tips for completing the extension form without a glitch. Tip 1: Relax. This form is one of the easiest tax ...
Views: 809 - Payroll Taxes - How to Reduce the Likelihood of a Tax Penalty by 31 Times - by Submitted on Feb 11, 2011 from Wayne DaviesHere's the latest version of the age-old story, "The Tale of Two Small Business Owners." It goes like this: Small Business Owner #1 is 31 times less likely to be penalized by the IRS than Small Business Owner #2. Hmmm. What gives? What is the difference between these two chaps? It's simple, ...
Views: 821 - Schedule C Forms That Must Be Filed - by Submitted on Feb 18, 2011 from Wayne DaviesAll Sole Proprietors must prepare Schedule C as part of their federal personal income tax return. But it's likely that you can't stop there. As the old saying goes - "That's not all!" There's a pretty good chance that by filing a Schedule C, you must also file several other forms that are ...
Views: 959 - Schedule C Tax Deductions - "D" is For "Don't Do Depreciation" - by Submitted on Feb 18, 2011 from Wayne DaviesDo your eyes glaze over at the thought of those mind-numbing depreciation rules? Well, take heart, sole proprietor. Thanks to a tax law known as Section 179, you can probably kiss those depreciation rules good-bye. Depreciation is the name we use for deducting the cost of business assets such ...
Views: 4473 - Schedule C Tax Deductions - "E" is For Employees, Education and Entertainment - by Submitted on Feb 18, 2011 from Wayne DaviesLooking for legitimate tax deductions for your income tax returns this year? Here are three common expenses you can deduct on Schedule C, all starting with the letter "E". Employees. There are several legal deductions related to your employees. Obviously, the compensation you pay them is ...
Views: 3373 - Schedule C Tax Deductions - How to Deduct the Cost of Goods Sold - by Submitted on Feb 18, 2011 from Wayne DaviesAre you a sole proprietor who sells a product? Then you need to know how to deduct expenses related to the sale of those products. The purpose of this article is to give you an overview of what is potentially your biggest tax deduction. First, let's discuss an important concept related to ...
Views: 1889 - Schedule C Tax Tips - 3 Easy Ways to Reduce Self-Employment Tax - by Submitted on Feb 25, 2011 from Wayne DaviesFrustrated with the amount of self-employment (SE) tax you pay each year? You should be. The sole proprietor pays twice as much in SE tax (15.3%) as the employee pays in federal payroll taxes (7.65%). What's a Schedule C filer to do? Here are three ways to reduce the dreaded SE tax. 1. Take ...
Views: 1539 - Schedule C Tax Tips - How to Report Income on Your Tax Return (Part I) - by Submitted on Feb 25, 2011 from Wayne DaviesDo you ever get confused about reporting your income on Schedule C? This article will help you get un-confused. First, let's define what we mean by "income". Generally speaking, income is the money you receive from the sale of products or services in your small business or self-employment ...
Views: 1076 - Schedule C Tax Tips - What Income Tax Forms Should You File? - by Submitted on Feb 25, 2011 from Wayne DaviesAre you running a small business as a sole proprietor? Are you confused about which tax forms you are required to file? Here's an overview of the most common forms you'll need to prepare this tax season. 1. Schedule C, Profit or Loss From Business. Be sure you really are a sole proprietor ...
Views: 975 - Schedule C Tax Tips - What Payroll Tax Forms Should You File? - by Submitted on Feb 25, 2011 from Wayne DaviesIf you own a sole proprietorship and have employees, what payroll-related tax forms are you required to file? This article will answer that question. First things first. Let's check to make sure you really have employees. Take a look at Schedule C, Line 26, Wages. If there's an amount on that ...
Views: 2410 - Schedule C Tax Tips - What's Deductible? - by Submitted on Feb 25, 2011 from Wayne DaviesWhat is the most frequently asked tax question? Are you ready? Here it is: "What's deductible?" That's it. Without a doubt, it's the most common tax question I receive every year. It comes in several forms, such as: -How do I identify all the deductions I'm allowed to take? -Is there ...
Views: 1571 - Schedule C Tax Tips - Why Filing Schedule C-EZ May Be a Big Mistake For Your Small Business - by Submitted on Mar 04, 2011 from Wayne DaviesAre you a sole proprietor who files the shorter Schedule C-EZ rather than the traditional (and longer) Schedule C? If so, please read on to find out why you may be making a big mistake. First, a quick review of the qualifications for using Schedule C-EZ. You qualify if you meet these ...
Views: 1129 - Small Business Deductions - How to Drive the IRS Crazy - by Submitted on Mar 04, 2011 from Wayne DaviesLooking for an easy way to increase your business deductions? Look no further than your driveway. First, the general rule: your vehicle is deductible to the extent you use it for business. So, if you drive your car 100% for business, all car-related expenses are deductible. But if you use ...
Views: 932 - Small Business Tax Deductions - "F" is For FICA, FUTA & FIDO - by Submitted on Mar 04, 2011 from Wayne DaviesIf you own a small business and are looking for deductions, don't miss out on these. The first two you've probably heard about but don't really understand (until now). The third one may seem far-fetched (pardon the pun) but is legitimate if the circumstances described below fit your ...
Views: 3983 - Small Business Tax Deductions - "G" is For Gifts & Gas - by Submitted on Mar 04, 2011 from Wayne DaviesHere are two valid expenses you can deduct on your small business income tax return, both beginning with the letter "G". Gifts. You can deduct the cost of gifts to customers and other business associates such as vendors, suppliers and service providers (like your accountant, attorney or ...
Views: 1107 - Small Business Tax Deductions - How to Deduct Meal Expenses Without Keeping Receipts - by Submitted on Mar 04, 2011 from Wayne DaviesThe mantra of tax record-keeping has remained relentlessly burdensome for decades: no receipt, no deduction. But fear not, you who loathe the never-ending climb up the mountain of paperwork required by the U.S. tax code. Many of our most beloved tax rules have exceptions, and such is the case ...
Views: 1752 - Small Business Tax Deductions - How to Deduct Non-Deductible Commuting Mileage - by Submitted on Mar 04, 2011 from Wayne DaviesFor most folks, commuting mileage is a non-deductible expense -- unless you know the legal tax loophole I'm about to reveal. The non-deductibility of commuter miles is painfully true for the employee who fights rush hour traffic every day, twice a day, for 5 to 10 hours a week. All that ...
Views: 1044 - Small Business Tax Deductions - How to Deduct Your Next Vacation - by Submitted on Mar 04, 2011 from Wayne DaviesIt is perfectly legal to deduct your next vacation. Here's how to do it. To qualify for this deduction, you must meet the following two criteria: 1. You are self-employed or own a small business 2. On your next trip, you combine business with pleasure. The first requirement is pretty ...
Views: 1056 - Small Business Tax Mistakes - Why Getting a Big Refund is a Bad Idea - by Submitted on Jun 18, 2011 from Wayne DaviesI will never forget the day that a tax client came into my office to pick up his income tax return. "How's it look?" he asked. "Well," I said, "It looks like you're getting a refund." "Great! How much?" "Oh, it's a big one," I said. "Over $5,000 dollars." Mr. Client couldn't have ...
Views: 885 - Small Business Tax Tips - 3 Reasons to Benefit From IRS Audit Rates - by Submitted on Jun 18, 2011 from Wayne DaviesWho's afraid of the IRS? Let's face it: We all are! And with good reason. IRS horror stories abound, and we all know someone who's been through an IRS audit and barely lived to tell about it. So the purpose of this article is to help calm those fears. Maybe I can't remove them completely, but ...
Views: 808 - Small Business Tax Tips - Are You a Sole Proprietor (and Don't Even Know It?) - by Submitted on Jun 18, 2011 from Wayne DaviesDo you wonder whether the IRS views you as a sole proprietor? Then you came to the right place. Step right up and get an answer to this all-important question. According to the IRS, a sole proprietor is someone who owns an unincorporated business by himself or herself. There are two key words ...
Views: 873 - Small Business Tax Tips - How to File an Extension For Your Income Tax Return - by Submitted on Jun 18, 2011 from Wayne DaviesFor all you procrastinators out there, here's a nuts 'n bolts guide on how to legally postpone the filing of your 2008 income tax returns. When it comes to putting things off, you can never plan too far ahead. In many cases the IRS allows you to file a no-questions-asked extension form. Which ...
Views: 814 - Small Business Tax Tips - How to Get a $1,000 Refund For a Return You've Already Filed - by Submitted on Jun 28, 2011 from Wayne DaviesDid you know you can get a refund for a return that you already filed? Yep, it's true. If you think you forgot a deduction on a previously filed return, you have three years to tell the IRS about it and receive a refund. Here's how it works: You can file an amended return up to three years ...
Views: 726 - Small Business Tax Tips - How to Prepare Form 4562 in 5 Simple Steps - by Submitted on Jun 28, 2011 from Wayne DaviesIf you bought equipment for your business last year such as a computer or a printer, you can deduct those items on your business income tax return. Usually that means tackling Form 4562 and entering one of the most complicated areas of tax law, the dreaded world known as depreciation. For ...
Views: 1164 - Small Business Tax Tips - I Forgot to Send Out 1099's by January 31 - What Do I Do Now? - by Submitted on Jun 28, 2011 from Wayne DaviesAre you a small business owner who hires independent contractors? If so, you may be required by the IRS to send out a Form 1099-MISC to those people. This article will help you determine your obligation to issue those 1099's. The basic rule works like this: Form 1099-MISC is used to report ...
Views: 1219 - Small Business Tax Tips - What's the Difference Between a Tax Deduction and a Tax Credit? - by Submitted on Jun 28, 2011 from Wayne DaviesDo you understand the difference between a tax deduction and a tax credit? This story should clarify the difference. A self-employed client (let's call her Debbie) came to me to prepare her income tax return. She was quite distraught because she had a balance due of $400. She could barely ...
Views: 812 - Small Business Tax Tips - Why You Might Need to File Two Returns This Tax Season - by Submitted on Jun 28, 2011 from Wayne DaviesDoes just the thought of preparing your income tax return this year make your blood boil? And when you're done, do you break out the champagne and celebrate like it's New Year's Eve? (Or just reach for the Tylenol?) Well, guess what? I'm going to suggest that you inflict yourself with that ...
Views: 690 - Small Business Taxes - 6 Compelling Reasons to Pay Your Taxes Electronically - by Submitted on Jul 08, 2011 from Wayne DaviesDid you know that the IRS has made it significantly easier to make your federal tax payments on time? Let me introduce you to EFTPS - the Electronic Federal Tax Payment System. It's been running along quite smoothly for many years now, and if you're not using it, here are six compelling ...
Views: 843 - Small Business Taxes - Do You Need an Employer Identification Number (EIN)? - by Submitted on Jul 08, 2011 from Wayne DaviesIf you run a small business or engage in self-employment activities, you may need an Employer Identification Number (EIN) issued by the IRS, whether or not you have employees. An EIN, also known as a Federal Tax Identification Number, is used to identify a business entity for tax ...
Views: 900 - Small Business Taxes - How to Contact the IRS Without Breaking Into a Sweat - by Submitted on Jul 08, 2011 from Wayne DaviesWe all love to criticize the IRS, don't we? It's easy to ridicule a huge organization of government bureaucrats who often seem to be Public Enemy #1. Our negative attitude toward the IRS can lead to a strong desire to just ignore it altogether. But self-employed people who ignore the IRS do ...
Views: 882 - Small Business Taxes - How to Get an Employer Identification Number (EIN) - by Submitted on Jul 08, 2011 from Wayne DaviesDo you need an Employer Identification Number (EIN) for your small business? You may be required to get an EIN for any number of reasons, such as: 1. Hiring employees 2. Forming a corporation 3. Forming a partnership 4. Buying a business 5. Starting a retirement plan 6. Filing ...
Views: 823 - Small Business Taxes - How to Pay the Right Amount of Quarterly Estimated Tax - by Submitted on Jul 08, 2011 from Wayne DaviesDo you have trouble calculating quarterly estimated tax payments? Here are some helpful tips to make the process much easier and less stressful. If you're newly self-employed and unfamiliar with the IRS' estimated tax payment schedule, here are the due dates for the Year 2009 quarterly ...
Views: 970 - Small Business Taxes - How to Turn Bookkeeping Boredom Into a $175 Per Hour Payday - by Submitted on Aug 10, 2011 from Wayne DaviesFor most small business owners and self-employed people, bookkeeping is about as much fun as a root canal. But like it or not, it must be done, otherwise you'll end up overpaying your taxes big time. Perhaps this article will help you see this tedious task in a new light. Follow along with me ...
Views: 946 - Small Business Taxes - New Law Turns Tax Loophole Into a Crater - by Submitted on Aug 10, 2011 from Wayne DaviesTired of dealing with those complex depreciation rules? Thanks to recent tax law changes, here's how to avoid them completely while benefiting from a lucrative small business tax break that not only puts money in your pocket, but also makes the filing of your income tax return much ...
Views: 888 - Small Business Taxes - What Are Quarterly Estimated Tax Payments and Why Must You Pay Them? - by Submitted on Aug 10, 2011 from Wayne DaviesIf you are a sole proprietor, a self-employed person or an independent contractor, you are faced with the probability of making federal quarterly estimated tax payments. These are called "quarterly" payments, but don't that word fool you. In typically confusing IRS jargon, here are the due ...
Views: 1053 - Small Business Taxes - What Happens If You Don't Make Quarterly Estimated Tax Payments? - by Submitted on Aug 10, 2011 from Wayne DaviesHow about a quick multiple-choice question on the world's most complicated subject: taxes. Here's the question: As a sole proprietor or self-employed person, what will the IRS do to you if you don't make federal quarterly estimated tax payments? Here's the possible answers: a. Carry you ...
Views: 876 - Small Business Taxes - What is Self-Employment Tax and Why Must You Pay It? - by Submitted on Aug 10, 2011 from Wayne DaviesIf you are new to the world of self-employment, it's time for you to meet an old nemesis known as Self-employment tax. Self-employment (SE) tax is the sole proprietor's version of the social security and Medicare tax paid by employees. In case you didn't realize it, in 2008 employees were ...
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