Being your own boss is great, but slightly different rules apply to you (and we don’t just mean pant-less conference calls).
Depending on your type of business and where you conduct business, there may be additional forms you will need. Don’t worry, that is what we are here for!
BUSINESS INCOME INCLUDES
- Money paid to you for sales of products or for services you provide
- Services or goods provided to you as payment
- Income reported on Form 1099-Misc, line 7
- Any other income received in the course of business
It is important to keep separate and accurate records for any businesselated income or expense. With proper records, you can take deductions or credits for expenses related to your business income.
BUSINESS USE OF YOUR HOME
If you use part of your home as your office, you may be able to deduct some expenses. However, that part of your home must be used regularly and exclusively:
- As the principal place of business for your trade or business,
- As the place where you meet and deal with your patients, clients or customers in the normal course of your trade or business
Or you can use a separate structure on your property which is not attached to your home, if it is used in connection with your trade or business.
Self-employment tax is the social security and Medicare amount due on your net earnings which is separate from any income tax due on your income.
Deductions will help reduce the total amount of self-employment income that is subject to this additional tax.
Eric was a great find for me – I work in advertising, and he understands all the unique tax requirements, and opportunities, for creative professionals.