One of the areas of your tax return at which the IRS looks most closely is the section covering car deductions. There’s a reason for this: it’s a difficult set of tax laws to navigate and many people over-deduct or use sloppy estimates, resulting in more money for the government when they catch you. You don’t need receipts for everything, since it’s difficult to get receipts for things like mileage, but you do need detailed records of everything.
Car deductions are easy if you have a company car. In this case, you can just deduct the whole shebang. … Read more »
Most everyone knows that there are certain common parameters that make you more likely to get audited by the IRS, such as:
making more than $100,000
having low income and high expenses
claiming high deductions for meals and entertainment, travel, and car expenses
being self-employed and/or claiming a home office
holding a mostly cash-income job, such as waiting tables or bartending
But did you know that the IRS actually uses a very strict formula to determine most of the tax returns that get scrutinized? It’s called the “DIF Score,” (Discriminate Income Function) and while the actual formula is very closely guarded secret, … Read more »
Today when I opened my mailbox, I found a notice from the IRS about the “economic stimulus act of 2008.” I wrote about this back in January, but Congress apparently made it happen in time for this tax season.
There’s plenty of confusing language in the one-page letter, and lots of provisions that don’t fit quite so neatly into their “How to Determine Your Stimulus Payment” chart, but basically it breaks down like this:
If you made less than $75,000 in 2007 and you owe income tax (i.e. you’re not expecting a refund), your “stimulus payment” is $600.
If … Read more »
Unless you have truly hit upon “the next big thing” and your business takes off without any effort from you, you will likely need an extra source of income while you get started. Up until this fall I was a full-time teacher, so it would have been fairly easy to keep teaching part-time while starting my business. But teaching requires a lot of take-home work, and uses up a lot of mental energy even when you’re not on the job. It’s also not the kind of work that I could ultimately apply towards … Read more »