Eric Tyson - Small Business Taxes For Dummies

For general information on our other products and services, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002. For technical support, please visit https://hub.wiley.com/community/support/dummies .

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com . For more information about Wiley products, visit www.wiley.com .

Library of Congress Control Number: 2021952989

ISBN 978-1-119-86114-0 (pbk); ISBN 978-1-119-86115-7 (ebk); ISBN 978-1-119-86116-4 (ebk)

1 Cover

2 Title page

3 Copyright

4 Introduction About This Book Foolish Assumptions Icons Used in This Book Beyond the Book Where to Go from Here

5 Part 1: Understanding Small Business Taxes Chapter 1: Small Business Taxes 101 Valuing Year-Round Tax Planning Noting How Corporate and Individual Tax Reform Impacts Small Business Considering the SECURE ACT of 2019 and COViD-19 Relief Tax Acts Contemplating Potential Upcoming Tax Law Changes Understanding the Different Types of Taxes You Pay and Your Tax Rates Chapter 2: Making Important Business Decisions Choosing Your Business Entity Valuing Employee Benefits Chapter 3: Retirement Accounts and Investments for Small Businesses Beginning with Retirement Account Basics: Tax Breaks, Penalties, and Saving Guidelines Surveying Your Retirement Account Options Developing Realistic Investment Return Expectations Selecting Top-Notch Investments for Your Retirement Account Chapter 4: Real Estate and Your Small Business Deciding Whether to Work out of Your Home Leasing Space for Your Business Buying Business Property Chapter 5: Estate Planning Determining Your Estate’s Tax Concerns Reducing Expected Estate Taxes with a Few Strategies

6 Part 2: Ongoing Tax Jobs Chapter 6: Keeping Track of Your Small Business Revenues and Costs Establishing an Accounting System for Your Business Keeping Good Tax Records for Your Small Business Chapter 7: Form 1040 Filing Options Sizing Up the New and Improved Form 1040 Tackling the Income Lines Schedule 1: Additional Income and Adjustments to Income Adjustments to Income Nonrefundable Credits: Schedule 3 Chapter 8: Schedule C: Profit or Loss From Business Detailing Schedule C Getting the Basics Down Part I: Income Part II: Expenses Chapter 9: The Business Use of Your Home Checking Out the New, Simplified Home Office Deduction Filling Out Form 8829 Understanding the Downsides to Home Office Deductions Chapter 10: Estimated Taxes, Self-Employment Taxes, and Other Common Forms Form 1040-ES: Estimated Tax for Individuals Keeping Current on Your Employees’ (and Your Own) Tax Withholding Schedule SE: Self-Employment Tax Form 8889: Health Savings Accounts (HSAs)

7 Part 3: Getting Help Chapter 11: Dealing with Notices and Audits Understanding the Basics You’ll Find on an IRS Notice Assessing Assessment Notices Handling Non-Assessment Notices What You Should Know about Audits Correcting IRS Errors Amending a Return Taking Action Even When You Can’t Pay Your Taxes Reducing Your Chances of Being Audited Chapter 12: Keeping Up with and Researching Tax Strategies and Rules The Benefits of Preparing Your Own Return Using IRS Publications Buying Software Accessing Internet Tax Resources Hiring Help Chapter 13: Paying for Tax Help Deciding to Hire Tax Help Finding Tax Advisors Interviewing Prospective Tax Advisors

8 Part 4: The Part of Tens Chapter 14: Ten+ Useful Apps and Software Packages for Small Business Tax Issues Tracking Expenses with Expensify Processing Sales with Square Managing Transactions with EMS+ Marking Miles with MileIQ Managing Your Accounting with QuickBooks Handling Accounting and Invoicing with FreshBooks Preparing Taxes with TurboTax Self-Employed Completing Taxes with H&R Block Tax Preparation and Filing Software Chapter 15: Ten Often Overlooked Tax Reduction Opportunities Invest in Wealth-Building Assets Fund Some Retirement Accounts Contribute to a Health Savings Account Work Overseas Calculate Whether a Deduction Is Worth Itemizing Trade Consumer Debt for Mortgage Debt Consider Charitable Contributions and Expenses Scour for Self-Employment Expenses Married Couples Should Crunch the Numbers on Filing Separately Tax Breaks for Minority Owned Businesses and Those in Low-Income Areas Chapter 16: Ten Resources to Turn to After Reading This Book To Develop a Good Business Plan and Improve Your Small Business To Whip Your Finances into Shape To Select the Best Business Entity To Set Up an Accounting and Financial Management System To Hone Your Investment Savvy for Your (and Your Employees’) Retirement Funds For Help with Payroll Regulations and Employee Tax Withholdings To Dig Deeper into IRS Rules and Regulations To Deal with IRS Collection Efforts For More Detailed Advice about All Aspects of Your Income Tax Return For Assistance in Preparing Your Income Tax Return

9 Index

10 About the Author

11 Advertisement Page

12 Connect with Dummies

13 End User License Agreement

1 Chapter 1 TABLE 1-1 2022 Federal Income Tax Brackets and Rates

2 Chapter 3 TABLE 3-1 “Saver’s Tax Credit” for the First $2,000 in Retirement Plan Contribut...TABLE 3-2 How Compounding Grows Your Investment DollarsTABLE 3-3 Longer-Term Fund Asset Allocation

3 Chapter 5TABLE 5-1 States with an Estate or Inheritance Tax

4 Chapter 7TABLE 7-1 A General Guide to What Schedule(s) You’ll Need to File

5 Chapter 9TABLE 9-1 The Simplified Option versus the Regular MethodTABLE 9-2 Depreciation Percentage for Business Use of Home

1 Chapter 1FIGURE 1-1: State marginal tax rates.

2 Chapter 2FIGURE 2-1: The corporate tax form — IRS Form 1120 — entails a high degree of d...FIGURE 2-2: Page one of IRS Form 1120S, “U.S. Income Tax Return for an S Corpor...FIGURE 2-3: Page one of IRS Form 1040 Schedule E, “Supplemental Income and Loss...

3 Chapter 7FIGURE 7-1: Form 1040. FIGURE 7-2: Schedule 1 of Form 1040. FIGURE 7-3: Schedule 3 of Form 1040, Page 1.

4 Chapter 8FIGURE 8-1: Schedule C, page 1.

5 Chapter 9FIGURE 9-1: Form 8829, “Expenses for Business Use of Your Home.”

6 Chapter 10FIGURE 10-1: Schedule SE.

1 Cover

2 Title Page

3 Copyright

4 Table of Contents

5 Begin Reading

6 Index

7 About the Authors

1 i

2 ii

3 v

4 vi

5 1

6 2

7 3

8 4

9 5

10 6

11 7

12 8

13 9

14 10

15 11

16 12

17 13

18 14

19 15

20 16

21 17

22 18

23 19

24 20

25 21

26 22

27 23

28 24

29 25

30 26

31 27

32 28

33 29

34 30

35 31

36 32

37 33

38 34

39 35

40 36

41 37

42 38

43 39

44 40

45 41

46 42

47 43

48 44

49 45

50 46

51 47

52 48

53 49

54 50

55 51

56 52

57 53

58 54

59 55

60 56

61 57

62 58

63 59

64 60

65 61

66 62

67 63

68 64

69 65

70 66

71 67