“Tax Tips for Home Based Businesses” plus 1 more

---

Tax Tips for Home Based Businesses Posted: 07 Mar 2012 04:00 AM PST Save 20% On Any TurboTax Online Edition for 3 Days Only and Get Free Tax Advice! Many Canadians are now operating their own business, and most of them do so from their own home. If you're one of these Canadians, you're going to want to start managing your taxes to reduce the amount of taxes owing related to your new venture. There are number of important deductions that you should remember when preparing your business taxes. Here are some of the most common: Business use of Home Home based business use of home deductions are generally the largest deduction available to most business owners. You can claim these expenses if your home is your principal place of business or you earn income by using the space to regularly meet with clients, such as a hairdresser that cuts hair within their home. The deduction is a percentage of your total home expenses. You can calculate the percentage by taking the square footage of the space in your house specifically devoted to business use. Let's say, for example, you have a one hundred square foot office that you use exclusively for business purposes. If your house is one thousand square feet, your business use of home deductions will be 10% of your household costs. These household costs can include utilities, telephone and internet costs (a dedicated business line can be deducted in full), and household cleaning supplies. In addition, if you are a home owner, you can claim both your property taxes and mortgage interest. Note that this does not equal your mortgage payment; you can only claim the interest component, not the principle payment. You should check your annual mortgage statement provided by your bank or mortgage broker for the split between these two amounts; it will vary year to year. If you are a renter, you can claim the business use percentage of your monthly rental cost. You cannot deduct these expenses, however, from income that your business does not have. If your business is operating at a loss, you cannot claim these expenses, and if you're operating at a profit, you can only claim these expenses to the extent that you do not create a business loss. These expenses can be carried forward to the next business year, however. Vehicle Expenses More Tax Tips Income Taxes and the Self-Employed Top 5 Tax Deductibles for Self-Employed Workers and Small Businesses It is important to note that you can only claim vehicle costs that are applicable to the business use of the vehicle. The Canada Revenue Agency recommends that you keep a mileage log of all vehicle usage, so that you can determine what percentage of the vehicle usage is related to your business. Once you've determined this percentage, you can then apply it to your total vehicle costs to determine your deduction. These total vehicle costs include regular maintenance, fuel and repairs. You can also claim the interest used on any vehicle financing, again, claiming only the percentage of business use. This also applies to lease payments. Insurance Commercial insurance premiums can be deducted from your business income. This would include premiums on equipment, tools or specific buildings used in your business activities. Home insurance premiums can also qualify, but only the portion equivalent to the percentage of your home used specifically for business use. It should also be noted that life insurance and other owner specific insurances are not deductible from business income. As you can see, there are a number of deductions available for those running a business from their home. Using these deductions effectively will ensure that you pay the least amount of tax possible on your business income. Check out our Tax Center for more tips and discounts! WIN FREE TURBO TAX COPY!

Tax Credits- Life Changes and AMT Posted: 07 Mar 2012 03:55 AM PST Save 20% On Any TurboTax Online Edition for 3 Days Only and Get Free Tax Advice! As you prepare your 2011 tax returns, be sure to educate yourself on the possible changes in the tax code this year. Two new credits have been increased. Do they apply to you? Did you Experience any Significant Life Changes in 2011? If you experienced  a major life change in 2011, such as the birth of a child, the adoption of a child, a marriage or a death, the manner in which you file this year's return will be slightly different than last year's. Plus, changes in available tax credits may mean that you will receive increased deductions, ultimately saving you money. That is- if you know what the exemptions are and how to leverage them for your benefit. If you adopted a child in 2011, you will be thrilled to note that the adoption credit has been increased for 2011 to $13,360 per child. The income limit for the adoption credit is based on your modified adjusted gross income (MAGI), currently set at $185,210 for 2011. If your MAGI exceeds this amount, the amount of your credit will begin to phase out. Does the AMT Apply to You? AMT, or alternative minimum tax, applies to those individuals or families with incomes that exceed a pre-defined threshold level. Each year, filers must pay the greater of their regular tax or alternative minimum tax. There is good news for 2011 filers! The AMT tax exemption has been increased for 2011 to $48,450 for single filers, and $74,450 for those married filing jointly. Life changes and alternative minimum taxes are just two examples of how changes in the 2011 tax law may impact your return's bottom line. Be sure to consult with a tax professional to determine which credits you are eligible to take advantage of on your 2011 federal tax return. WIN FREE TURBO TAX COPY!

You are subscribed to email updates from Financial Highway To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610