Small Business

Cellular phone equipment (similar to computers) must be used for the "convenience of the employer" and be a "condition of employment" for the taxpayer in order for it to be fully expensed or for the cellular phone costs to be depreciated.
Condition of employment means you cannot properly do your job without it.
You may write off the cost under the first year expensing rule or use a 5 year MACRS life for depreciation.

If you purchase your own small tools for use on your job and they are not reimbursed from your employer, you may deduct the cost as an itemized deduction subject to the 2 % limitation on Schedule A.
If the tools have an expected useful life of more than one year, then the costs should be depreciated or the first year expense election may be taken.

You may not deduct any part of the standard monthly charge for the first telephone line into your home.
If you have more than one line which is used for business, the costs are fully deductible.
The costs will include phone rentals, business long distance calls, and optional services such as call forwarding and call waiting.
To avoid possible problems with the IRS, it is suggested that you maintain separate business and personal phone lines.

The costs of buying and maintaining clothing that can be considered suitable for street wear are not deductible.
The costs of buying and maintaining Uniforms or work clothes not suitable for street wear are deductible. Uniforms for police or fireman are examples of uniform itemized deductions.

Most new business equipment can be either depreciated over its useful life or expensed immediately under Internal Revenue Code Section 179.
For a tax year beginning in 2012, the Code Sec. 179 expensing election is reduced to $139,000, with a $560,000 investment-based ceiling (down from $500,000/$2 million).
For tax years beginning after 2012, it will be further reduced to $25,000 with a $200,000 investment-based ceiling.
For a tax year beginning after 2011, expensing can no longer be claimed for qualified real property.
Generally qualifying property is:Tangible personal property (such as machines, equipment, furniture). Certain other tangible property used for specific purposes.
Single-purpose agricultural or horticultural structures.Certain storage facilities. Railroad gradings or tunnel bores.

Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be 55.5 cents per mile for business miles driven.
In 2011, the standard mileage rate(s) for 1/1/11-6/30/11 is business = 51 :The standard mileage rate(s) for 7/1/11-12/31/11 is business = 55.5 :

Yes, but if you are a sole proprietor you don't have to withhold Social Security and Medicare taxes. Your child must receive a W2 and report this income on his or her return.

When starting a business, your choice of entity includes: operating as a SOLE PROPRIETORSHIP if you own it by yourself; forming a PARTNERSHIP if there are two or more owners; or being designated as a CORPORATION or a LIMITED LIABILITY COMPANY. Your choice to operate as a corporation involves tax and non-tax considerations which require in-depth analysis of your particular situation and can only be done with a CPA in person. However, generally speaking, a corporation provides protection against personal liability for business obligations and offers the greatest flexibility in terms of ownership and transferability. Most businesses for this reason are incorporated. Further discussions with a CPA are recommended before finalizing your decision.

Payroll taxes include Social Security, Medicare, federal and state taxes that are withheld from an employee's check, as well as the taxes which are due by the employer for having employees.
For example, an employer must match the amount of Social Security and Medicare tax withheld and remit those taxes in a timely manner.