Oiy! I've been continuing work on my taxes for this year. Running a bit late. I didn't think it would take me this long, but I figure since this is my first time filling out all the stuff for Self-Employment I just needed to learn the ropes and it will go a bit quicker next year...hopefully.
Tip: Form 8829 has been a big help in reducing my SE tax for this year. It's the form you fill out to get a deduction for business use of the home. Warning its a pdf. document.
Anyway you fill out form 8829 and put the resulting deduction on line 30 of Schedule C, which is how you calculate the profits or loss of your small business for the year. Deductions are my friends!
Corporations
Since I've also been writing up some articles for a client on the real estate business I've been picking up quite a bit about incorporated. A lot of readers have probably heard that its best that a writer incorporate when they start earning over a $100,000 a year because it saves them a lot of money in taxes.
Well, its true. If you set up a C corporation there are about three hundred extra deductions you can take on taxes. But there are a lot of little requirements you need to fulfill, so its best to wait until you begin earning a lot more before setting up said corporation.
Not all of us newbies are certainly going to need to set up a corporation. If you want to see someone who's actually earning quite a bit with their online writing (blog) check out John Chow's tax problems. Damn, I wish I had those problems.
Wednesday, April 4, 2007
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2 comments:
Interesting post. I want to run a business soon, so I'll have to keep this in mind. I know it’ll be challenging, but I’m up for it and will appreciate all the help I could get. Instead of starting a business, I've been thinking about buying a business. Any suggestions? Advice? Thanks.
@Rachael -- There are a lot of resources you can use on the Internet. I suggest BizTrader.com, which is an online global marketplace where you can buy a business or even sell a business. It's also a good place to find professional help like a broker, lawyer, accountant, lender, etc.
Then there are the local small business groups in your area that are worth joining. They're a good place to network.
Good luck!
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