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US Tax Time Soon - Start Preparing Now

If you get money back, you probably file your taxes January 2. If not, April 14. ;)

It is good to keep your tax records organized all year around. Much easier not to miss anything that is due you or that you owe.

Never too soon to get started if you haven't been doing that.

Remember that every single dime you spend on your business is a tax deduction if you file to itemize deductions. This works even if you have a job and pay income taxes deducted from your check (in fact I used to come out better that way).

However if you do not work outside your home at all, you can take more deductions than if you have both a job and a business.

I used to keep a cool Excel spreadsheet all year and add to it everytime I bought something or received money. A very simple formula on each column would recalculate everytime there was an addition.

I have gotten lazy, but still keep a folder with all receipts and check stubs and then before I make an appointment with my tax guy, I pull together the spreadsheets and receipts.

I print out statements from Paypal and other payment processors which really helps. I copy all my credit card statements as I pay my bills each month and put them in the folder.

I save money on my taxes because I walk in with an organized report of expenditures and income, rather than a big box full of junk for the tax preparer to figure out.

To get exact numbers and percentages go to the IRS website.

Some examples of deductions;

Whatever space (square feet) you have in your home that you use EXCLUSIVELY for office space, can be figured as a percentage of your rent - (if you also work outside the home, then they want a door on the room that is your office - if you work 100% at home, they don't care about a door)

A percentage of your utilities, (electric/gas), percentage of phone bill, home owners insurance, security system costs, medical & dental insurance/expenses, charitable donations -

PC maintenance, software, technical support (including blog services or site enhancements) office supplies, equipment (computer, chair, desk, flash drives, etc), training, business cards, tax preparation fees

Hosting, domain name registration, business license, your ISP expense (internet service provider)

Membership dues for all affiliate programs (my guy calls these advertising); marketing and advertising resources and tools -

Payment processing fees such as the fees charged by Paypal for receiving money; bank account fees for business account.

If you use your car even just to go to the office supply store, you can deduct mileage and gas.

If you have any advertising on your car such as a plaque or sign, you can deduct most automobile expenses since technically every time you drive your car you are advertising your business. (you have to check what all this includes as I have not done this personally yet)

These are all perfectly ethical and legal deductions in the US. However, as a caution do not ever declare a deduction for a penny that you don't have a receipt for.

There is a lot of abuse and as such they can be strict on home businesses. Once you get audited, they will be on your case for years, particularly if they find anything 'funny'.

I will add to this as I think of more. If anyone sees any changes that make any of what I have listed not applicable this year please advise here. They do change the laws and I don't know this year yet.