On Your Mark… Get Set ….. Go!
The IRS has recently announced that they will not start processing 2013 tax returns until January 31, 2014. This means there is no reason to efile or mail in your tax forms before then.
Before sending in your tax forms, here’s a review of the key business tax forms you must file and the order you should be filling them out.
On this form you will enter the numbers that will be used to determine your Time-Space Percentage. This includes the amount of square feet you used on a regularly basis for your business, the total square feet of your home and the number of hours you used your home for your business.
Enter all of your house-related expenses on this form, including: property tax, mortgage interest, rent (if you rent your home), utilities, house insurance, house repairs, and house depreciation. Use our Business Tax Organizer and Checklists.
If you live in the home where you do child care, you must file this form. If you don’t, claim your house expenses directly on Schedule C Profit or Loss From Business.
Enter the amount from Form 8829, line 35 onto Schedule C, line 30.
- Enter on this form any items that cost more than $100 and were used in your business.
- This could include furniture, appliances, computer, fence, patio, home improvement, etc.
- Don’t enter your house depreciation here. Instead, enter it on Form 8829.
- Enter the amount from Form 4562, line 22 onto Schedule C, line 13.
Enter on this form your income and all other business expenses.
Enter the amount from Schedule C, line 31 (your net income/profit) onto Form 1040 U.S. Individual Income Tax Return, line 12. In addition, enter the amount from Schedule C, line 31 onto Form 1040 SE Self-Employment Tax, line 2.
After entering your net income from Schedule C on line 2, fill out the rest of the form to determine your Social Security/Medicare tax on line 5. Enter this amount on Form 1040 U.S. Individual Income Tax Return, line 56.
Also enter the amount on 1040 SE, line 6 (half of your Social Security/Medicare tax) onto your 1040 tax form, line 27.
By doing so you will be deducting half of your Social Security/Medicare tax as a deduction that will reduce your personal income taxes.
* Line 12 showing your net income/profit from Schedule C, line 31.
* Line 27 showing half of your Social Security/Medicare tax from Form 1040 SE, line 6.
* Line 56 showing your Social Security/Medicare tax.
You may have other personal tax forms that you might be filing with your Form 1040.
Image Credits: RGS Business Solutions
Source: Tom Copeland Blog