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TAXES: If I have a small home business, what are my tax advantages?

December 5th, 2012 Leave a comment Go to comments

I don’t generate much income at all (yet!) but would really like to pump up the volume on my business. (it’s a wholesale business. I’ll be looking at fundraisers this year to try and generate a clientele).

Please, I’m serious. If you don’t know, don’t answer.

If health insurance is an issue (ie, you have to provide your own for yourself), strongly consider getting a C-corporation. If not, consider an S-Corporation. There are SO many advantages of a small business. You can deduct your business computer, business cell phone, related auto expenses, health care expenses, etc. It’s an incredible effective tool for growing wealth. I strongly recommend against being a sole properitor (sp) business. You’ll get eaten alive with taxes — if you make any income). A C-corp also lets you carry your losses forward, which is great when you may have a lot of expenses and not a ton of income (now), but when you make money (later), you’ll have that loss carry forward which will wash out income, and wash out taxes.

Email me with any questions, Good luck!

Jared

  1. zhicheng_2006_lai
    December 5th, 2012 at 09:31 | #1

    You can report your income with schedule C on 1040. You can also deduct your ordinary and necessary business expenses.
    The business expenses includes: advertisement, home office, office supply, auto expenses …. The difference of income and expenses is called net income which is subject both self-employed tax and income tax.
    Check the form and instruction for detail:
    http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
    http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

    -Zhicheng Lai Enrolled Agent in MD
    References :

  2. Jared F
    December 5th, 2012 at 09:40 | #2

    If health insurance is an issue (ie, you have to provide your own for yourself), strongly consider getting a C-corporation. If not, consider an S-Corporation. There are SO many advantages of a small business. You can deduct your business computer, business cell phone, related auto expenses, health care expenses, etc. It’s an incredible effective tool for growing wealth. I strongly recommend against being a sole properitor (sp) business. You’ll get eaten alive with taxes — if you make any income). A C-corp also lets you carry your losses forward, which is great when you may have a lot of expenses and not a ton of income (now), but when you make money (later), you’ll have that loss carry forward which will wash out income, and wash out taxes.

    Email me with any questions, Good luck!

    Jared
    References :

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