Wednesday, June 9, 2010

"Tax Tips Home-Based Businesses Can Bank On"

DOES CONGRESS EVER THINK
ABOUT THE CONSEQUENCES
OF LEGISLATION THEY PASS?

 

In your home-based business, do you ever pay $600
or more -- over the course of the entire year -- to any
vendors, suppliers, stores, print shops, etc.  

Of course!
       Autoship purchases?
       Post Office or UPS?
       Staples or Office Depot?
       Airlines?
       Kinko's or a Print Shop?

 
Surprise!
Quietly tucked into the "Obamacare" health bill is
a little item that has nothing to do with healthcare,
but a LOT to do with your small business.


Here's what happened.
Congress thinks a lot of businesses aren’t reporting
all of their income, and thus under-paying their taxes.
So their brilliant solution?

 
A new law will force every taxpayer who spends $600
or more with any individual person or company, to
file a 1099 at the end of the year for every single
one of them.


Yes, that includes companies like Best Buys, United
Airlines, and Vista Print, in addition to individuals
such as Independent Contractors, freelancers, etc.

This requirement specifically includes Corporations,
which were formerly exempt from this requirement.

As a home-based business owner, you may need

to begin collecting Employer Identification Numbers
from the sales clerk at the Mac Store, your cell phone
company, your internet service provider, and even
your landlord. 



The Commissioner of the IRS, recognizing the huge
additional burden this places on taxpayers (as well
as the IRS computer system!), claims they will be
looking at a variety of options for minimizing the
impact.

 
He has mentioned only ONE so far:
Since the IRS already requires all credit card
companies and banking institutions to turn over
their complete records to the IRS every year
(including overseas transactions), you may be
able to get out of filing 1099s for companies
you pay by credit card or debit card. 


Although it is always better to pay any business
expense by credit card, because it provides
additional documentation.  We may soon have
another incentive to do so.


Possible good news? 
This new legal requirement doesn't go into effect
until 2012 so there still is time for Congress to
come to its senses and rescind the law, or for
the IRS to find ways to streamline the requirement.


Did you hear the 'Cell Phone' Tax
Deduction Announcement?  

Ronald Mueller is asked many times about tax-deductions 
for cellular phones, that I want to make sure you know this --

The IRS has issued a "Safe Harbor" ruling. That
means
"you do not have to follow this, but if you do,
the auditors will not challenge you."

 
The ruling says if you have a cell phone that is primarily
for business purposes, you may claim 75% of the costs
as a tax-deductible business expense -- and no special
record keeping is required.



You may find out more information concerning the advantages
of owning a home-based business when it comes to tax
strategies by visiting Ronald R Mueller, MBA, Ph.D website at
the following link:  http://www.HomeBusinessTaxSavings.com


Make it a great day!


Lloyd Dobson




2 comments:

Judy said...

Thanks so much for these tax tips. So many of us just do not realize how many deductions we are entitled to.

Judy said...

Thanks for posting these tax tips. So many of us just do not realized how many deductions we are not using, without having a home business.