Archive for the ‘Personal Tax’ Tag

Tax Credits   Leave a comment

Employee Deductions

-Employee salaries are deductible.

-Retirements plans for you and your employees are deductible.

-Business-Related Education expenses are deductible for seminars, classes, educational tapes or CDs, and convention fees.

Capital Expenses

-You can depreciate your property that you own over several years or

-You can depreciate your propert using section 179 to deduct it all.

-Even repairs are deductible

Auto Deductions

-If using your car for personal and business you will need to deduct using milage which is $0.50 per Mile.

-If you are using your care for just business you can depreciate the vehicle over a number of years plus the sales tax and improvements.

These are some other Auto Expenses you can deduct:

Depreciation 
Licenses
Lease  
payments
Registration  
fees
Gas Insurance Repairs
Oil Garage rent Tires
Tolls Parking fees  

Traveling deducations for Meals, Accomodation and Entertainment

-transportation such as by airplane, train or bus is deductible.

 -Getting around where you need to by taxi, commuter bus, and airport limousine is deductible.

-Baggage and shipping company material is deductible.

-Lodging by using a Hotel or Motel is deductible.

-Meals are deductible by 50%

-Dry Cleaning and Laundry are deductible.

-Telephone calls are deductible.

-Tips for any of these deductions are also deductible.

-Computer and other equipment rental services are deductible.

Home Office Deduction

If you run your business from home or apartment, you are able to use your home for a tax credit. According to the IRS “These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation”. Other stuff such as repairs or adding a security system is also tax deductible.  

You can only take a deduction depending on how much of your home you use for business. For example, if you only use one room as your office, you would want to calculate how much in a percentage of space your office takes.

To determine the percentage of your office, you can use the following as an example:

  • Your office is 240 square feet (12 feet × 20 feet).
  • Your home is 1,200 square feet.
  • Your office is 20% (240 ÷ 1,200) of the total area of your home.
  • Your business percentage is 20%.

Once you know how much of a percentage you can deduct, you can start getting some numbers to report. So for example lets say that your home utilities costed you $5,000 for the year ending. You will be able to have a tax deduction of $1,000(20% of $5,000).

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