Full Description

Tax Power for the Self-Employed addresses the specific and particular tax laws and regulations facing a self-employed individual. Unlike other small businesses, it focuses on the individual who either runs a single-person small business (or one with an otherwise limited number of employees) or the person who does something to make extra money that he or she may consider a hobby or side job, but from which the IRS expects tax to be paid.

Discussions of specific concern to the self-employed person include Schedule C deductions, with particular emphasis on changes in Sec. 179 deductions that target self-employed individuals for increased capital investments. Additional attention is placed on strategies for taking deductions to lower income subject to the self-employed tax, a totally separate tax from income tax. An entire chapter is devoted to the self-employment tax and Schedule SE.

With the latest IRS rules, regulations and decisions, as well as tax-planning strategies, any self-employed individual can feel confident that they are meeting all of their tax requirements while maximizing their tax savings.

Table of Contents

Section 1: Making Money

Chapter 1: Self-Employment Income
Self-Employment Tax vs. FICA
Income
Taxable Income Sources
Nontaxable Income Sources

Chapter 2: Hobby Income and Loss
Deductions Available for Activities not Engaged in for a Profit
Activities that are Presumed to be Engaged in for a Profit
Combining Activities in Order to Qualify for the Presumption
Proving a Profit Motive when the Presumption does not Apply
Applying the Hobby Loss Rules to Business Entities
Factors that Qualify an Activity as a Trade or Business

Chapter 3: Phantom Income
The Tax Consequences of Increases in Inventory
Tax Consequences of Equipment Purchases
Tax Consequences of Using Profits to Buy Out Other Owners
Tax Consequences of Using Profits to Make Principle Payments on Debts
The Tax Consequences of Using Profits from a Trade or Business to Acquire an Additional Trade or Business
Most Common Sources of Phantom Income

Section 2: Saving Money

Chapter 4: Business Deductions for the Self-Employed
Business Deductions
Qualifying to Take Business Deductions
Some Specific Business Deductions
Business Deductions that are Subject to Special Limitations
Common Business Deductions

Chapter 5: In-Home Office Expense Deductions
Uses that must be both Exclusive and Regular
Uses that must be Regular, but not Exclusive
Expenses Eligible for Home Office Deduction
Drawbacks to Taking a Deduction for Business Use of a Residence
Special Rules Concerning Deduction for Business Use of a Residence
Limitations on the Home Office Deduction

Chapter 6: Deductions for the Cost of Goods Sold

Chapter 7: Non-Business Deductions Available to Self-Employed Taxpayers
Non-Business Adjustments for Adjusted Gross Income
Moving Expenses
Tuition and Fees Deduction
Deduction for One-Half of Self-Employment Tax
Self-Employed Health Insurance Deduction
Deductions for Payments to Retirement Accounts
Non-Business Deductions for Adjusted Gross Income

Chapter 8: Deductions from Adjusted Gross Income
Itemized Deductions
Schedule A Itemized Deductions

Chapter 9: Exemptions
Personal Exemptions
Exemptions for Dependents
The Phase-Out of Exemptions

Chapter 10: Federal Income Taxes and Common Tax Credits
Regular Federal Income Taxes
Alternative Minimum Tax
Steps in Determining a Self-Employed Taxpayer’s Federal Tax Liability
Tax Credits
Personal Credits
Most Common Tax Credits

Chapter 11: Retirement Planning for the Self-Employed
Individual Retirement Arrangements
Roth IRA
Simplified Employee Pension Plans
SIMPLE IRA
Other Retirement Plans
Tax-Deferred Retirement Options Available to the Self-Employed

Section 3: Paying Money

Chapter 12: Tax Law Compliance by the Self-Employed
The Duty to Make Estimated Tax Payments
The Duty to Withhold Taxes from Workers’ Earnings
Fulfilling the Duty to Withhold Taxes
Payment of Withholding Taxes
Civil Penalty for Noncompliance
Filing Appropriate Returns
Tax Crimes and the Self-Employed Taxpayer
Summary of an Employer’s Duties Regarding Federal Taxes
Checklist of a Self-Employed Party’s Duties Regarding Federal Taxes

Glossary
Appendix: Distinguishing between Employees and Self-Employed Independent Contractors
Guides for Distinguishing between Independent Contractors and Employees
Form SS-8
Factors that Indicate a Worker is an Independent Contractor
Factors that Indicate a Worker is an Employee
Index
About the Author

Excerpt

Editorial Reviews

Customer Reviews

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