Tax tips for Business
Business or Hobby?
It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take.
Business Eligibility for Schedule C-EZ.
Your business may have become eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit and loss on your last year's federal income tax return, according to the IRS.
Deductible Home Offices.
Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.
Earned Income Tax Credit for Certain Workers
Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.
Filing Deadline and Payment Options
If your'e trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies here. If you find you need more time to finish your return, you can get a four-month extension of time to file using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. And if you have trouble paying your tax bill, the IRS has several payment options available.
Your Appeal Rights
Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.
If you are an educator, you may be able to deduct up to $250 of expenses you paid for purchases of books and classroom supplies, even if you don't itemize your deductions, according to the IRS. These out-of-pocket expenses may lower your 2007 tax bill.