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Tuesday, January 4, 2011

Taxes: Home Business

Home business owners, freelance writers and photographers, and direct sellers (in no particular order):

Please click on our TAX "label" for any information we may have published about taxes in general.  We are NOT a tax service, but we do have to file taxes like the rest of you. We're simply sharing what we wished someone shared with us (or... sharing what some lovely person HAS shared).  Always, always, ALWAYS, keep in mind that tax tips are only as good as the day they are written, but usually, they are great guides, regardless.

"...legislation that creates the tax laws we are bound to has been active where authors (and artists and film makers as well) are concerned. It isn’t difficult to get tax advice regarding simple items such as what form to use and what records to keep. What is a lot harder to find is information about the particular legislation aimed directly at this industry. The law is easier to understand if you trace back the prior rules first.",,id=175146,00.html,,id=204169,00.html,,id=167363,00.html

"...The artistic temperament simply does not interface well with the exacting rule-filled world of federal and state taxation. Writers tend to avoid the whole matter and consequently leave themselves vulnerable to bad advice and to overpaying taxes. The secret to overcoming this phobia is to develop an understanding of the mechanisms of the tax code and some simple, effective ways of complying with this onerous task. I often use the analogy that you may not need to know how to fix your car but it is helpful to know how it basically works. In so doing you will pay less in taxes and you will be less likely to fall prey to erroneous tax information and disreputable [advisers]." 

"... Freelance writers who have made any income the previous year will need to fill out a long 1040 as well as a Schedule C and a Schedule SE (self-employment tax) to report profit and loss. Keep in mind that if planning to deduct a lot of expenses, additional forms will need to be filled out as well. Consult a tax professional for extensive returns."

IRS: List of Guilds, etc.,,id=100602,00.html

Nolo (Law for All):
" can still deduct ordinary and necessary business expenses that you incur at home -- for instance, long-distance phone calls, a separate business telephone line, and the cost of office supplies and equipment. The above IRS rules apply only to the expenses of actually running and maintaining your home, such as utilities, rent, depreciation, home insurance, mortgage interest, real estate taxes, and repairs."

We'll add as we gain new insights and information and always, we'll label it as TAX so it's easy to find.

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