Small Business

Taxpayers are entitled to deduct any expenses for using their homes for business purposes if the expenses are attributable to a portion of the home or separate structure used Exclusively and On A Regular Basis as the principal place of any business carried on by the taxpayer (occasional use is not sufficient) or a place of business that is used by clients, customers, patients, in meeting or dealing with the taxpayer in the normal course of business. If the taxpayer is an employee, the business use of the home must also be for the convenience of the employer. A home office deduction may be claimed if the taxpayer regularly and exclusively uses part of the home for conducting the administrative or management activities of the business. Home office expenses may include real estate taxes, mortgage interest and operating expenses such as insurance and utilities and also depreciation. Home office deductions may be limited. The allowed deduction is calculated and reported on IRS Form 8829 and then transferred to the taxpayers Schedule C. There are certain tax consequences of claiming a office in the home deduction. A consequence occurs when the taxpayer sells his residence. Current law allows a $500,000 exclusion on the sale of a residence ($250,000 for non joint returns). If a residence is sold with a home office, the gross sales price must be apportioned over the residence and the business office. A taxable gain on the sale may occur. If a residence is sold without a home office the full exclusion may be taken. Some CPA's suggest not claiming a office in your home for the two years prior to the sale of the residence. Speak to your local CPA about your specific circumstances to work out a strategy that works for you.

Taxpayers are entitled to deduct any expenses for using their homes for business purposes if the expenses are attributable to a portion of the home or separate structure used Exclusively and On A Regular Basis as the principal place of any business carried on by the taxpayer (occasional use is not sufficient) or a place of business that is used by clients, customers, patients, in meeting or dealing with the taxpayer in the normal course of business. If the taxpayer is an employee, the business use of the home must also be for the convenience of the employer. A home office deduction may be claimed if the taxpayer regularly and exclusively uses part of the home for conducting the administrative or management activities of the business. Home office expenses may include real estate taxes, mortgage interest and operating expenses such as insurance and utilities and also depreciation. Home office deductions may be limited. The allowed deduction is calculated and reported on IRS Form 8829 and then transferred to the taxpayers Schedule C. There are certain tax consequences of claiming an office in the home deduction. A consequence occurs when the taxpayer sells his residence. Current law allows $500,000 exclusion on the sale of a residence ($250,000 for non-joint returns). If a residence is sold with a home office, the gross sales price must be apportioned over the residence and the business office. A taxable gain on the sale may occur. If a residence is sold without a home office the full exclusion may be taken. Some CPA's suggest not claiming an office in your home for the two years prior to the sale of the residence. Speak to your local CPA about your specific circumstances to work out a strategy that works for you.

Generally your freelance job will issue you 1099-MISC slips for earnings more than $600. The gross amount of your freelance jobs should be reported on IRS Schedule C along with the corresponding expenses. The net amount of this business income is subject to Federal tax and Social security taxes. The federal tax will be calculated on the tax bracket you fall into Also, the net amount of your business multiplied at .9235 multiplied at .133 will equal your social security tax. If wages exist the social security tax may be reduced. This calculation is done on IRS Schedule SE. The net business income will be subject to state tax depending on your state. Speak to your local CPA about the tax consequences of your freelance job(s).).

Generally your freelance job will issue you 1099-MISC slips for earnings more than $600. The gross amount of your freelance jobs should be reported on IRS Schedule C along with the corresponding expenses.
The net amount of this business income is subject to Federal tax and Social security taxes.
The federal tax will be calculated on the tax bracket you fall into
Also, the net amount of your business multiplied at .9235 multiplied at .133 will equal your social security tax.
If wages exist the social security tax may be reduced. This calculation is done on IRS Schedule SE.
The net business income will be subject to state tax depending on your state. Speak to your local CPA about the tax consequences of your freelance job(s).

You should initially apply online. Go to www.irs.gov/businesses and click on employer ID numbers. Your local IRS service center can also assist you in getting a Federal EIN. The phone number is 1-800-829-4933:

Call or write to the IRS. Keep records of all of your attempts to contact an agent. Be polite and specific when calling, and refrain from becoming incoherent if you are feeling anxiety. Fill out IRS Form 911 if you cannot resolve conflict or find resolution through an IRS agent. Write your complaints in this form using blue or black ink. Be specific and complete all information requested. File a complaint with the Inspector General if you need to report cases of fraud or corruption by an IRS employee or contractor. Do not file complaints about your personal tax issues with this agency. Give details and have evidence of the violation or illegal activity in the complaint.

Talk to Taxpayer Advocate. The Taxpayer Advocate Service is an independent organization within the IRS. They help taxpayers whose problems with the IRS are causing financial difficulties; who have tried but have not been able to resolve their problems with the IRS; and those who believe an IRS system or procedure is not working as it should.. You can call your local advocate, whose number is in your phone book, in Pub. 1546, Taxpayer Advocate Service – at www.irs.gov/advocate or You can also call 1-877-777-4778 or 1-877-777-4778 . Call or write to the IRS. Keep records of all of your attempts to contact an agent. Fill out IRS Form 911 if you cannot resolve conflict or find resolution through an IRS agent. File a complaint with the Inspector General if you need to report cases of fraud or corruption by an IRS employee.

You should always try not to sign personally if you don't have to. However the seller or the bank will usually request your personal guarantee on any note. The more money down and collateral at risk, the less likely, and your personal signature will be required. A good CPA can negotiate and work with your lawyer to minimize your personal exposure.

Quite often, a seller of a business is willing to hold a note for a portion of the business purchase. When the seller holds paper or this note, the purchase of the business is facilitated since the buyer does not have to go to traditional lending sources.