The one question that every business owner
has asked is "How do I get to keep more of my hard-earned
business money before the government taxes it away?"
The answer is: DEDUCTIONS
As a small business owner, you work, try to grow your business,
and hope to make a profit. What you keep from that profit
depends on the income tax you pay.
You are not taxed on all the income you bring in by way of
sales, fees, commissions, or other payments. Instead, you
are essentially taxed on what you keep after paying off the
expenses of making the sales that are the heart of your business.
The next question small business owners ask
is "What can I deduct?"
There are more deductions than what can be covered here and
what you can deduct depends entirely on every individual's
situation. Although the IRS allows these deductions, they
do put strict limitations on them.
For your convenience, you can download any forms required
from the IRS forms
and publications page, and the following forms are referenced
within our tax tips section:
2004 Form 1040
Schedule C (instructions)
2004 Form
8829 (instructions)
2004 Form
2106 (instructions)
2004 Form 1040 Schedule
SE (instructions)
2004 Form
4562 (instructions)
Navigate the Tax Tips section using the menu on the right,
or download the PDF for off-line viewing: DMS Tax
tips (28K)
Here are some more tips:
KEEP GOOD RECORDS! You have to be able to back up your deductions
with proof of when the expense was paid or incurred, the amount
of the expense, and the reason why it is deductible. Using
a computer to keep your books and records can simplify both
recordkeeping requirements and tax return preparation.
FILL OUT ALL FORMS AND SCHEDULES REQUIRED!
FILE ON TIME!
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