Tax Tips for Business
Business or Hobby?
It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take.
Business Eligibility for Schedule C-EZ
Your business may have become eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit and loss on your last year’s federal income tax return.
Deductible Home Offices
Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.
Filing an Extension
If you can’t meet the March 15 deadline to file your tax return, you can get an automatic six-month extension of time to file. The extension will give you extra time to get the paperwork in, but it does not extend the time you have to pay any tax due. You will owe interest on any amounts not paid by the March deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.
Your Appeal Rights
Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.
Information about IRS notices
It’s a moment any taxpayer dreads. An envelope arrives from the IRS — and it’s not a refund check. But don’t panic. Many IRS letters can be dealt with simply and painlessly.