<p><span style="font-weight: 400;">There’s a lot to keep track of when you’re starting your small business. One of the most important is tracking your expenses so that you can write off <a class="link" href="https://1800accountant.com/blog/small-business-tax-deductions-checklist">business tax deductions</a> when it's time to file. </span>Did you know that each mile you drive for business purposes can be deducted?<span style="font-weight: 400;"> You can claim deductions for a wide range of vehicle uses, from driving to client meetings and buying supplies to delivering packages to the post office.</span></p>



<p>The vehicle tax deduction is one of the most beneficial annual tax deductions available to small businesses. However, due to a lack of understanding, many business owners do not take full advantage of this benefit or make mistakes when claiming it. To maximize the advantages of the vehicle business expense, it's important that you thoroughly understand and consider all the aspects involved. Continue reading as we discuss everything you need to know about the vehicle tax deduction to maximize your savings.</p>



<h2><b>Lease or Own?</b></h2>



<p><span style="font-weight: 400;">The first decision an owner has to make is whether to lease or own a vehicle. This can be dependent on a lot of things: your credit score and/or cash flow, where you operate your business, and how often you travel for work. Leasing may cost you less per month, but there are restrictions on the miles you can use.</span></p>



<p><span style="font-weight: 400;">Once you obtain the vehicle, there are a few things to consider: if you use the standard mileage rate (we’ll get to that later), the lease payment is not deductible. If you use the actual expenses, you cannot depreciate the vehicle (hold on, we’ll talk about that in a bit.)</span></p>



<h2><b>Standard Mileage or Actual Expense?</b></h2>



<p><span style="font-weight: 400;">Now that you have your vehicle, the next decision a small business owner has to make is whether to take the standard mileage rate or the actual expenses incurred during the year. </span></p>



<h3>Standard Mileage</h3>



<p><a class="link" href="https://www.irs.gov/tax-professionals/standard-mileage-rates">Per the IRS</a>, in 2023, the standard mileage deduction rate has increased to 65.5 cents per mile driven for business use. <span style="font-weight: 400;">When taking the mileage deduction, you can also expense the interest on the auto loan, registration fees, parking, and tolls.</span></p>



<h3>Actual Expense</h3>



<p><span style="font-weight: 400;">The alternative to the mileage deduction is taking actual vehicle expenses. These include gas, oil changes, maintenance, repairs, licenses, insurance, and parking garages. Similar to the mileage deduction, you can deduct the auto loan interest, registration fees, parking, and tolls when choosing the actual expense.  Dependent on whether you have leased or purchased the vehicle, you can deduct the lease payments or take depreciation.</span></p>



<p><span style="font-weight: 400;">Taking the actual expenses has been very popular due to the </span><a class="link" href="https://smallbusiness.chron.com/depreciate-company-car-53368.html"><span style="font-weight: 400;">included depreciation expense</span></a><span style="font-weight: 400;">. Some business owners decide to purchase luxury vehicles so that the depreciation is a higher number. </span></p>



<p>In 2023, vehicles used entirely for business purposes can depreciate up to $28,900 and an additional 80% bonus depreciation, if they qualify for the special depreciation allowance​. If the vehicle is also used for personal purposes, you can still claim this depreciation, but it will be proportionate to the business use of the car.</p>



<h2><b>Varying Mileage and Actual Expense</b></h2>



<p><span style="font-weight: 400;">A very important point - you can switch from the mileage deduction to the actual expense. However, the basis of your vehicle will be reduced by a portion of the standard mileage rate that was deducted. This means a small- to no-depreciation expense going forward. You are not allowed to make the switch back, from the actual expense to the mileage deduction.</span></p>



<h2>Work With Business Tax Experts To Maximize Your Savings</h2>



<p><span style="font-weight: 400;">Choosing how to expense your travel as a small business owner is a complex task. Following the above steps, starting with what kind of vehicle you want and or can afford, and then deciding how best to maximize your savings can yield a promising return on your taxes when filed correctly. </span>If you're having difficulties optimizing your deductions, don't hesitate to reach out to 1-800Accountant's <a class="link" href="https://1800accountant.com/services/small-business-taxes">business tax experts</a> by scheduling a free call to see how we can help.</p>

There’s a lot to keep track of when you’re starting your small business. One of the most important is tracking your expenses so that you can write off business tax deductions when it&#8217;s time to file. Did you know that each mile you drive for business purposes can be deducted? You can claim deductions for [&hellip;]

Woman's hand on a steering wheel, driving in traffic

vehicle-deductions-for-small-businesses

Vehicle Tax Deductions: Everything You Need To Know

<p>It takes hard work and dedication to make it as a self-employed trucker. 1099 truck drivers aren’t just driving a truck — they’re running their own business at the time!&nbsp;</p>



<p>Truckers have to juggle many tasks, including driving, truck maintenance, job searching, and highway safety to name a few. Despite the challenges, they value their freedom and work hard along the way. At the end of the year, they also have to prepare and file all the tax paperwork for their businesses. </p>



<p>But even independent business owners don’t have to figure out everything alone. Take a moment now and save yourself a headache later by getting <a class="link" href="https://1800accountant.com/services/industry/trucking">tax advice for 1099 truck drivers</a> from the experts.&nbsp;&nbsp;</p>



<h2>How Do 1099 Truck Drivers File Taxes?<strong>&nbsp;</strong></h2>



<p>How do truck drivers file taxes when they don’t have an employer handling most of it for them? If you’ve never done it on your own before, tax preparation can seem intimidatingly complicated, but it’s not that hard once you get the hang of it.&nbsp;</p>



<p>Freelance owner-operator truck drivers legally operate their own small businesses, so they have to file taxes accordingly. You should expect to <a class="link" href="https://www.irs.gov/forms-pubs/about-form-1099-misc" target="_blank" rel="noreferrer noopener">receive an IRS Form 1099 from each client</a>, which serves as the official record of your income. </p>



<p>You’ll report your income on your personal tax return with IRS Form 1040, and you’ll <a class="link" href="https://www.irs.gov/forms-pubs/about-schedule-c-form-1040" target="_blank" rel="noreferrer noopener">attach Form 1040 Schedule C</a> as a specific report about your business profits and expenses.&nbsp;</p>



<h2>How to Maximize Tax Deductions as a 1099 Truck Driver&nbsp;</h2>



<p>The most important thing to know about independent contractor truck driver taxes is that you can deduct your business expenses from your taxable income. Many expenses qualify for deductions, and maximizing your savings means keeping track of all of them.&nbsp;</p>



<p>To claim every deduction you qualify for, record your expenses and keep the receipts throughout the year. Track and record everything, so you don’t need to hunt down receipts when tax season comes around.&nbsp;</p>



<p>Claiming specific business expenses as deductions does not mean you need to itemize expenses on your personal tax return. Your business deductions and your personal deductions are two separate categories, which means you can claim the standard deduction on your personal tax return and still go on to claim all available business deductions as well.&nbsp;&nbsp;</p>



<p>Go to an accounting professional for <a class="link" href="https://1800accountant.com/services/business-tax-advisory">small business tax advisory services</a>. You can also ask for a truck driver expenses worksheet to help you keep track of all the regular costs you can deduct from your income.&nbsp;&nbsp;</p>



<h2>4 Types of Tax Deductions Truckers Need to Know About in 2023</h2>



<p>Nearly anything you spend for the sake of your business can be deducted when filing your taxes. Here are just a few of the most common and significant 1099 truck driver tax deductions:&nbsp;</p>



<h3>1. Truck Upkeep Costs</h3>



<p>As a 1099 trucker, you depend on your vehicle. It’s central to everything you do to make money, and it’s the biggest source of expenses. Don’t leave any costs behind when you file vehicle-related expenses for deductions.&nbsp;</p>



<p>You can’t claim the IRS standard mileage rate for your truck expenses, but your total costs will likely end up higher than the standard rate, anyway. Here are some big truck costs you can deduct:&nbsp;</p>



<ul>
<li>Truck maintenance</li>



<li>Vehicle insurance</li>



<li>Vehicle depreciation</li>



<li>Loan interest or rent on the truck itself</li>



<li>Fuel&nbsp;</li>



<li>Registration</li>
</ul>



<h3>2. Life on the Road</h3>



<p>Many tax deductions for self-employed truck drivers have to do with travel. If you are a long-haul trucker, you can deduct a lot of living expenses incurred while traveling away from your home base:</p>



<ul>
<li>Costs of lodging</li>



<li>80 percent of meals&nbsp;</li>



<li>Other items purchased for personal use exclusively while on the road&nbsp;</li>
</ul>



<h3>3. Taxes and Fees</h3>



<p>The IRS requires you to pay various <a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/trucking-tax-center" target="_blank" rel="noreferrer noopener">trucking-related taxes</a> to do the work you do. All the truck taxes and registration fees are part of the basic cost of 1099 trucking, so they also qualify as business expenses:</p>



<ul>
<li>Heavy Highway Vehicle Use Tax</li>



<li>Self-employment taxes</li>



<li>Training and fees for your CDL</li>



<li>Any subscription or membership fees for professional associations</li>
</ul>



<h3>4. Other Business Costs</h3>



<p>Some business expenses you claim will be unique to your career in self-employed trucking, while others may be no different from the average office or local store. However mundane the expenses, they should not be included in your final taxable income. Here are some of the many common deductible business costs:&nbsp;&nbsp;</p>



<ul>
<li>Business-related insurance premiums</li>



<li>Health insurance premiums</li>



<li>Mandatory medical examinations if not covered by insurance</li>



<li>Work tools and cleaning supplies</li>



<li>Business-related cell phone costs</li>
</ul>



<h2>What Expenses Can’t be Claimed as a Truck Driver</h2>



<p>Tax write-offs for truck drivers can include all sorts of things, but they don’t include everything. You can’t deduct costs for fuel or other vehicle expenses when using the vehicle for any personal travel. You also can’t deduct meal costs when you are still in your local home area.&nbsp;</p>



<p>Furthermore, you cannot claim a standard per diem rate for lodging while on the road away from home, although you can claim deductions for specific lodging expenses. Other items purchased can only be claimed for deductions if they are for business and not everyday personal use.&nbsp;</p>



<h2>Common Tax Mistakes Truck Drivers Make</h2>



<p>Freelance truckers tend to leave a lot of available deductions behind when they file their taxes on their own. They don’t realize just how many business expenses are perfectly eligible to be deducted from their taxable income.&nbsp;</p>



<p>The biggest mistake 1099 truck drivers make on their taxes is waiting to think about their taxes until April. If you want to make the work easy for yourself, and if you want to actually keep your costs down, you need to be thinking about your tax return all year long.&nbsp;</p>



<p>This doesn’t mean you must put in a lot of work on your taxes throughout the year. The best thing you can do to prepare for filing taxes is simply to save your receipts and keep track of your expenses, day after day and month after month. &nbsp;</p>



<h2>Hire a Tax Professional<strong>&nbsp;</strong></h2>



<p>You’ll save both time and money by getting someone who knows the system on your side. A good tax professional can guide you through the process and ensure you <a class="link" href="https://1800accountant.com/blog/truck-driver-tax-deductions">claim all the truck driver tax deductions</a> you might be eligible for without leaving any savings on the table.&nbsp;</p>



<p>Tax preparation for truck drivers isn’t so simple, and you didn’t get into this work to spend your time poring over IRS fine print. Make your life easier and start working with the experts at 1-800Accountant. There’s no one better when it comes to <a class="link" href="https://1800accountant.com/services/industry/trucking">tax advice for 1099 truck drivers</a>.&nbsp;</p>

It takes hard work and dedication to make it as a self-employed trucker. 1099 truck drivers aren’t just driving a truck — they’re running their own business at the time!&nbsp; Truckers have to juggle many tasks, including driving, truck maintenance, job searching, and highway safety to name a few. Despite the challenges, they value their [&hellip;]

Woman truck driver sitting in a truck while holding on the steering wheel.

1099-truck-drivers-tax-advice-min

Truck Driver 1099 Tax Advice: What You Need to Know

<h2>What is Form 1120?</h2><p><a class="link" href="https://www.irs.gov/pub/irs-pdf/f1120.pdf" target="_blank" rel="noreferrer noopener">Form 1120</a>&nbsp;is an IRS form that <a class="link" href="https://1800accountant.com/blog/what-is-a-c-corporation" target="_self">C corporations</a> use to report their income, gains, losses, deductions, and credits, as well as calculate their income tax liability. Since C corporations are separate entities from their owner or owners, taxes are paid at the <a class="link" href="https://1800accountant.com/blog/corporate-tax-rates">corporate income tax rate</a> instead of the personal tax rate. Depending on how much revenue your corporation generated for the year, this rate could be anywhere between 15% to 35%.</p><p>Continue reading as we'll discuss how to fill out each page of Form 1120, when it's due, and how we can help with the process.</p><h2>How to Fill Out Form 1120</h2><p>Here's a helpful guide on what you'll need to fill out on each page of Form 1120:</p><h3>Page 1</h3><ul><li>Basic information about your corporation. This includes name, address, Employer Identification Number, date of incorporation, and total assets.</li><li>Gross income consists of gross receipts, costs of goods sold, dividends, interest, rents, royalties, capital gains, and other sources of income. You add all of this up to get your gross income.</li><li>Tax-deductible expenses. Lines 12 to 26 show all available deductions, including officers' compensation, salaries, wages, repairs and maintenance, charitable contributions, advertising, etc. On-Line 26, you can account for other expenses such as meals and entertainment, utilities, insurance premiums, etc. Check the Form&nbsp;<a class="link" href="https://www.irs.gov/pub/irs-pdf/i1120.pdf" target="_blank" rel="noreferrer noopener">1120 instructions</a>&nbsp;for more details about deductions.</li><li>Tax, refundable credits, and payments. This is the last section of page 1, where you calculate whether you receive a refund or owe money to the IRS. Refer to Schedule J on Form 1120 to get the information you need.</li></ul><h3>Page 2</h3><ul><li><strong>Schedule A</strong> – Cost of Goods Sold: If your corporation is service-oriented, then this section is not applicable to you. Otherwise, if your business is taking the deduction for the cost of goods sold on page 1, you must account for these amounts in this section.</li><li><strong>Schedule C</strong> – Dividends and Special Deductions</li></ul><h3>Page 3 &amp; 4</h3><ul><li><strong>Schedule J</strong> – Tax Computation and Payment</li><li><strong>Schedule K</strong> – Other Information: This includes your company’s accounting method, business type, NAICS classification number, ownership of stock, and information about your shareholders.</li></ul><h3>Page 5</h3><ul><li><strong>Schedule L</strong> – Balance Sheet per Books: You do not have to complete this section if your corporation’s total income and year-end assets are under $250,000.</li><li><strong>Schedule M-1</strong> – Reconciliation of Income (Loss) per Books with Income per Return.</li><li><strong>Schedule M-2</strong> – Analysis of Unappropriated Retained Earnings per Books.</li></ul><p>If keeping track of all this information seems overwhelming, it’s best to utilize professional bookkeeping and tax preparation services like&nbsp;<a class="link" href="https://1800accountant.com/" target="_blank" rel="noreferrer noopener">ours</a>&nbsp;to ensure your form is completed thoroughly and accurately.</p><h2>When is Form 1120 Due?</h2><p>When you operate a C-Corporation, you are given the option to choose when to start and end your tax year, but usually, it’s at the beginning and end of a quarter. For the 2022 federal tax year, Form 1120 is due on the 15th day of the fourth month after the end of your corporation’s tax year. For example, if your corporation’s tax year ends on December 31, 2022, you must file and pay your corporate income taxes by April 18, 2023. The due date must always occur on a business day.</p><h2>Work With Experts Who Know Corporate Taxes</h2><p>IRS Form 1120 is an essential document for C corporations to report income, losses, deductions, and credits while determining their tax liabilities. The process to complete this form can be a bit tricky, with there being various schedules and aspects to consider. This form is crucial in fulfilling your corporate tax obligations accurately, we recommend seeking professional help. At 1800Accountant, our <a class="link" href="https://1800accountant.com/services/small-business-taxes">business tax experts</a> stand ready to guide you through the process, ensuring your Form 1120 is filed correctly and submitted on time. This gives you time back to focus more on your business's growth and less on tax complexities.</p>

What is Form 1120? Form 1120 is an IRS form that C corporations use to report their income, gains, losses, deductions, and credits, as well as calculate their income tax liability. Since C corporations are separate entities from their owner or owners, taxes are paid at the corporate income tax rate instead of the personal tax [&hellip;]

A desktop with a calculator, a clock, a potted plant, and a note saying "tax time" on a pink background.

form-1120

Tax Form 1120: What It Is and How to File It

What Is Tax Form 1120 and How to File It

<p>Reporting taxable income to the Internal Revenue Service (IRS) isn't always a straightforward process. There are over 800 tax forms, from individual documents to information returns, which can create confusion and questions. This includes the common question: what is the difference between 1040 and 1099 tax forms?</p><p>IRS Form 1040 and 1099 are pivotal for tax purposes and income reporting. Form 1040, or U.S. Individual Income Tax Return, is the main tax form used to report annual income and claim deductions, credits, and other adjustments. On the other hand, Form 1099 is a series of forms used to report various income received throughout the tax year, such as interest, dividends, self-employment income, and more. This great blog will help you understand the difference between 1040 vs 1099 forms, along with detailed tips to help you fill out each.&nbsp;</p><h2>What Is a 1040 form?&nbsp;</h2><p>Form 1040 is the most common IRS form taxpayers use to file their annual tax returns. It includes reporting income and calculating federal income tax liability. Both employees and independent contractors are expected to complete and submit a 1040 tax form annually by the tax reporting deadline.&nbsp;</p><p>You’ll need to include income from employee (W-2) jobs and freelance (1099) jobs on this form. It tells you two things: what you owe and how much you’ll get back.</p><p>Each section of Form 1040 <a class="link" href="https://www.irs.gov/pub/irs-pdf/f1040s1.pdf" target="_blank" rel="noreferrer noopener">serves a specific purpose</a>:</p><ul><li><strong>Contact information </strong>– Taxpayers provide their personal information and state whether they’re single, married, and, if so, filing jointly or separately.&nbsp;</li></ul><ul><li><strong>Reporting additional income</strong> – This section lists the taxpayer’s income, including wages, salaries, and other forms of earned income, as well as unearned income from sources like investments. You’re also expected to include refunds, credits, or offsets.&nbsp;</li></ul><ul><li><strong>Calculating the adjusted gross income (AGI)</strong> – This section determines your AGI. This is the total income you received during the tax year, minus deductions and exemptions, such as small business expenses, health savings account (HSA) deductions, or IRA contributions.&nbsp;</li></ul><ul><li><strong>Calculating tax liability</strong> – After calculating your AGI, you can apply the correct tax rate to this figure, accounting for any other deductions, such as the <a class="link" href="https://www.irs.gov/credits-deductions/individuals/child-tax-credit" target="_blank" rel="noreferrer noopener">child tax credit</a>, which could reduce your tax liability.</li></ul><ul><li><strong>Report taxes owed or refunds due</strong> – If you owe taxes, the final section is the palace where you pay. If you are owed money back, you can select whether you want that deposited directly into your bank account or as a check.&nbsp;</li></ul><h2>Tips on How to Fill out a 1040 Form</h2><p>Use these great tips to help you avoid costly mistakes when filling out your Form 1040.&nbsp;&nbsp;</p><h3>#1 Gather All of the Relevant Documentation</h3><p>To properly fill out your 1040 form, you’ll need access to all relevant documents for reporting earned income, expenses, and deductions, such as your W-2, 1099 forms, donations, receipts, and so on.&nbsp;</p><p>Organizing and maintaining a comprehensive paper trail will not only make filing taxes easier but also helps you defend yourself in the event of a tax audit.&nbsp;</p><h3>#2 Understand Your Filing Status</h3><p>As the <a class="link" href="https://www.irs.gov/help/ita/what-is-my-filing-status" target="_blank" rel="noreferrer noopener">IRS notes</a>, “Your filing status is used to determine your filing requirements, standard deduction, eligibility for certain credits, and your correct tax.”</p><p>This will play a key role in your estimated tax rate and deduction and exemption eligibility. When it comes to selecting filing status, you typically have one of five options:&nbsp;</p><ul><li>Single</li><li>Married filing jointly</li><li>Married filing separately</li><li>Head of household</li><li>Qualifying widow(er)&nbsp;</li></ul><h3>#3 Claim All Deductions and Credits&nbsp;</h3><p>You should be aware of all of the deductions and credits you are eligible to claim.&nbsp;</p><p>These will depend on your specific circumstances, but they could include items like children's tax credits, charitable contributions, or work-related expenses. By claiming as many deductions and credits as you’re legally entitled to, you can lower your tax liability.&nbsp;</p><p>The 1040 form is brief, so you’ll need to attach additional forms if you have other types of income, tax credits, or tax deductions.</p><h3>#4 Double-Check Your Calculations&nbsp;</h3><p>Before you submit your 1040, be sure to double-check your calculations so that no errors are present. It can be helpful to refer to this guide on <a class="link" href="https://1800accountant.com/blog/how-to-fill-out-form-1040">how to complete form 1040</a> accurately.</p><p>You could face increased tax liability or penalties if mistakes are missed. By carefully reviewing your work, you can file your taxes confidently.&nbsp;</p><h3>#5 File Your Taxes on Time</h3><p>In normal circumstances, the tax filing deadline arrives on April 15th. If you’re unable to file your federal income tax return by this date, you can request an extension, though you’ll still be expected to pay an estimate on any taxes owed. How do you ensure it arrives on time?&nbsp;</p><ul><li><strong>If you file by mail </strong>– The envelope must be properly addressed, have the correct postage, be postmarked, and be deposited in the mail by the due date.&nbsp;</li></ul><ul><li><strong>If you file electronically</strong> – You must electronically submit the documents before the due date. This information will be contained within the electronic files and metadata. The IRS will usually send an email or text message verifying that they have received and accepted your return.&nbsp;</li></ul><div class="embedded-entry redactor-component block-entry" type="entry" data-sys-entry-uid="blt7626d80de5e39a0c" data-sys-entry-locale="en-us" data-sys-content-type-uid="rte_ad" sys-style-type="block"></div><h2>What Is the 1099 Form?&nbsp;</h2><p>Practically every taxpayer will be expected to <a class="link" href="https://1800accountant.com/blog/how-to-fill-out-form-1040">complete a Form 1040</a>, so long as they earn above a certain income threshold. However, if a person earns non-employee income, they may also be expected to fill out a 1099. The income reported on the 1099 form will eventually be added to a line on the 1040 form.&nbsp;</p><p>For example, if you’re self-employed or run a small business, you may be required to use a 1099 form to report your income. Contracted work, such as consulting or freelance, also falls under this tax bracket, which has become a major category thanks to the rise of the gig economy.&nbsp;</p><p>Today, independent contractors who earn at least $600 in annual income as freelancers or self-employed workers are expected to file a 1099–NEC.&nbsp;</p><p>A 1099 tax form is used to report various types of income that are unrelated to salary or wages. There are several variations of a 1099, including:&nbsp;</p><ul><li><strong>Form 1099-INT </strong>– Reports taxable interest income</li><li><strong>Form 1099-DIV</strong> – Reports dividend income</li><li><strong>Form 1099-B </strong>– Reports capital gains and losses</li><li><strong>Form 1099-MISC</strong> – Reports miscellaneous forms of income such as rental income or royalties</li></ul><p>Even if you have a salaried job, you may still need to fill out a 1099 form. For instance, if you rent out an additional dwelling unit (ADU), you may receive a 1099-MISC form from your tenants to report miscellaneous income.</p><h2>Tips on How to fill out a 1099 Form</h2><p>Like your 1040 form, there are several best practices to implement when filing your 1099 form to spare you time, money, and potential legal issues.&nbsp;</p><h3>#1 File the Right 1099 Form</h3><p>Since there are several different types of 1099s, it can be confusing to know what type of 1099 you need. It is critical to know how to fill out and submit the correct one.</p><p>Depending on your situation, you may only need to fill out one 1099 form, or you may be expected to fill out several different forms.&nbsp;</p><p>You should double-check to ensure that you receive a 1099 form for any income you received aside from salary or wages. Typically, that will be sent over from the person or organization that paid for your services. But, if you do not receive a 1099, you’re still responsible for reporting that income on the tax return.&nbsp;</p><h3>#2 Don’t Forget State Taxes&nbsp;</h3><p>In addition to federal taxes, you may also be responsible for paying state and local taxes on the additional income. Be sure to include 1099 income on your state and local tax returns as well.&nbsp;</p><h3>#3 Don’t Write off Personal Expenses&nbsp;</h3><p>When you operate independently, especially if you work at home, the waters between personal and business expenses can get quite murky.&nbsp;</p><p>For instance, if you use a phone or computer for both business and personal reasons, can you write it off?&nbsp;</p><p>You may be able to write off a portion of that. But not all. You can only deduct the percentage that is used exclusively for business purposes.</p><h3>#4 Pay Quarterly Taxes&nbsp;</h3><p>If you’re self-employed and owe at least $1,000 in taxes, you’re expected to pay your federal income taxes quarterly. To that end, you must accurately estimate and pay your quarterly taxes by the following dates in 2023:</p><ul><li>April 18, 2023</li><li>June 15, 2023</li><li>September 15, 2023</li><li>January 16, 2024</li></ul><p>Failure to pay quarterly taxes can result in fines and penalties. Most small businesses will also have to pay federal estimated taxes each quarter.&nbsp;</p><h2>Work with the Form 1040 and Form 1099 experts</h2><p>Filing taxes is rarely a straightforward process — no matter what form you’re filing, and calculating your sources of income and deductions can be challenging. That’s where 1-800Accountant can help. We’ll match you with a tax expert who knows the ins and outs of your industry and state tax rules. Whether you have <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business taxes</a> or are a salaried employee, we can save you time and frustration, and maximize your tax savings.</p>

Reporting taxable income to the Internal Revenue Service (IRS) isn&#8217;t always a straightforward process. There are over 800 tax forms, from individual documents to information returns, which can create confusion and questions. This includes the common question: what is the difference between 1040 and 1099 tax forms? IRS Form 1040 and 1099 are pivotal for [&hellip;]

Comparison of u.s. tax forms 1040 and 1099 with the title "1040 vs. 1099 explained" across the image.

1040-vs-1099

The 1040 vs. 1099 Tax Form Explained

Discover the potential advantages of the standard deduction for the tax year 2022-2023. Explore how it can lower your taxable income and lead to significant tax savings.

<p>Tax deductions are crucial for filing your tax return if you don’t want to pay more than your fair share.<a class="link" href="https://1800accountant.com/blog/tax-deductions-work"> Tax deductions work by deducting eligible expenses</a> from your overall taxable income. Less taxable income means owing less in taxes, and it can even mean slipping down a tax bracket. Knowing how much your tax deductions can help you make crucial tax deductions.&nbsp;</p>



<p>The expenses you can claim for deductions are not meant to be counted toward your taxable income. These are essential costs, and the IRS is intentional about not taxing the money that goes to paying them. Enter: tax deductions.&nbsp;</p>



<p>However, the system for claiming deductions is complicated, and it requires keeping records of expenses. Not everyone has a comprehensive paper trail of all their deductible expenses ready to put together for their 1040. That’s a lot of work for both the individual and the IRS.</p>



<p>One way the government makes this process smoother is with the standard deduction. This is the primary deduction option individual taxpayers should be aware of. Whether or not you claim it, it’s essential to understand how it works. Here’s what you need to know:</p>



<h2>What is the Standard Deduction?</h2>



<p><a class="link" href="https://www.irs.gov/taxtopics/tc551" target="_blank" rel="noreferrer noopener">The IRS offers the standard deduction</a> as a sizable tax deduction available to most individual taxpayers in the United States. It allows you to deduct a portion of your income from your total taxable income without claiming or proving your eligibility for specific tax deductions.&nbsp;</p>



<p>It effectively functions as a shortcut, allowing you to assume a certain amount of tax-deductible expenses and contributions, whether or not you have any records to suggest as much.&nbsp;&nbsp;&nbsp;</p>



<p>To be eligible for the standard deduction, you must be a U.S. citizen or legal resident. You can’t have a spouse filing separately with itemized deductions, and your tax return must be for a whole 12-month period.</p>



<h2>How Much is the Standard Deduction for 2022 and 2023?</h2>



<p>The IRS (Internal Revenue Service) generally makes<a class="link" href="https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022" target="_blank" rel="noreferrer noopener"> tax inflation adjustments each year to the standard deduction</a>, increasing it over time to keep pace with economic change. For the 2023 tax year, the standard deduction is $13,850 for a single individual and $27,700 for a married couple filing jointly.&nbsp;&nbsp;</p>



<p>For the 2022 tax year, which will apply as you file your tax return in April 2023, the single standard deduction is $12,950, while the deduction for a married couple filing together is $25,900.&nbsp;</p>



<p>Recent laws have increased the standard deduction significantly from what it was in the past, and it will continue to grow regularly.</p>



<h3>Increase for Senior Citizens</h3>



<p>Taxpayers 65 years or older get an increase in the standard deduction, further shielding them from a heavy tax burden. Single individuals get $1,850 more. A married couple filing jointly gets $1,500 more deducted for each spouse 65 or older.&nbsp;</p>



<h2>Standard vs. Itemized Deductions</h2>



<p>Itemized deductions involve presenting the IRS with a complete list of the tax deductions you are claiming and the amount of money they deduct from your taxes. You must present each deduction with valid documentation. This requires careful record management of your deductible expenses and the relevant receipts.</p>



<p>Here are a few of the deductions you can claim if you are itemizing your deductions:</p>



<ul>
<li>Mortgage interest</li>



<li>Student loan interest</li>



<li>Property taxes and certain other taxes</li>



<li>Charitable contributions</li>



<li>Medical costs</li>
</ul>



<p>If you claim the standard deduction, you take the shortcut and waive your right to claim specific deductions for individual taxpayers. It is a substitute option that functions in place of itemized deductions.</p>



<p>These deductions function separately from those you can claim as a small business owner if you earn income from self-employment.</p>



<h3>Charitable Contributions in the 2022 Tax Year</h3>



<p>While the rules explained above regulate how the standard deduction works in a typical year, the last couple of years has brought about unexpected changes. For the 2022 tax year, the IRS has adjusted the rules slightly to encourage charitable donations.&nbsp;</p>



<p>When you file your tax return for the 2022 tax year, you can claim deductions for donations you made to qualifying charities. This is done by itemizing deductions on your Schedule A in order to take a charitable tax deduction. It is also important to note that for 2022, the usual 60% AGI ceiling on charitable cash contribution is restored.&nbsp;</p>



<h2>When is it Better to Claim the Standard Deduction?</h2>



<p>The right option for you will depend on your particular tax situation. The only way to know for sure which is best is to add up every deduction available for you and find out whether the total is higher than the dollar amount already available with the standard deduction.&nbsp;</p>



<p>If you aren’t eligible for many deductions or don’t have the records or receipts to quantify and prove your itemized deductions, then it is likely a better choice for you to claim the standard deduction. If your situation isn’t clear, you can work with an accountant to figure out the best way forward.&nbsp;</p>



<h2>Work with an Accountant to Maximize your Deductions</h2>



<p>Find an accountant you can trust to help calculate payroll tax and work with you to increase your savings. This can come in the form of federal tax, property tax, social security tax, payroll tax, and more. &nbsp;Overall, this will help you prepare your tax documents checklist and get the notable tax forms. &nbsp;An expert can help you take advantage of every opportunity now and even prepare you for the future. They can help you set up a better record-keeping process for tracking deductible expenses in the future.&nbsp;</p>



<p>With enough planning, you can also schedule your deductible expenses to maximize deductions across multiple years. This way, you can alternate in different years between the standard deduction and itemized deductions, maximizing your overall tax savings over time.&nbsp;&nbsp;</p>



<p>Connect with <a class="link" href="https://1800accountant.com/services/small-business-taxes">tax professionals</a> at 1-800Accountant and make sure you maximize your deductions and get the optimal outcome on your tax return. Get the help you need and the savings you deserve<a class="link" href="https://1800accountant.com/services/income-taxes"> when you file your income tax return</a>.</p>

Tax deductions are crucial for filing your tax return if you don’t want to pay more than your fair share. Tax deductions work by deducting eligible expenses from your overall taxable income. Less taxable income means owing less in taxes, and it can even mean slipping down a tax bracket. Knowing how much your tax [&hellip;]

Notepad with the title "claiming tax deductions" displaying a list on a wooden desk, alongside a pen, smartphone, and keyboard.

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Standard Deduction for 2022-2023: Everything You Need to Know

<p>With tax season upon us, it's time to prepare your <a class="link" href="https://1800accountant.com/blog/end-year-tax-checklist">tax documents checklist</a>. Small business owners know that now is the time for tax preparation for 2023. Whether you’re a seasoned business owner or you’ve just passed your one-year anniversary, you know that there’s a lot of planning that goes into running a successful business. As a small business owner, there’s a lot to juggle between marketing strategies, inventory, budgeting, and taxes. Wondering how to file small business taxes efficiently? Take some time to read up on these small business end-of-year tax tips to get a jumpstart on the upcoming tax season. Your future self will thank you for a smoother tax filing!</p>



<h2><strong>Small Business Tax Planning and Tax Preparation: What’s changed for 2023?</strong></h2>



<p>The COVID-19 pandemic has dominated headlines since it broke out in 2019. It’s no surprise that this year has brought a new topic of intense focus: inflation. </p>



<p>From the gas pump to the grocery stores, inflation has impacted Americans a great deal.&nbsp;</p>



<p>In November 2021, the IRS (Internal Revenue Service) announced its<a class="link" href="https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022" target="_blank" rel="noreferrer noopener"> annual inflation adjustments</a> for the 2023 tax year. Here are a few notable changes to consider for tax planning for small businesses:</p>



<ul>
<li><strong>Medical Savings Account</strong>: Individuals who are covered with this type of plan must have an annual deductible of at least $2,450, which is a $50 increase from 2021. The maximum deductible is $3,700, $100 more than the previous year.</li>



<li><strong>Standard Deduction</strong>: This amount has increased for every type of taxpayer. The amount for married couples filing jointly is $25,900 (an $800 increase), and heads of households will have a standard tax deduction of $19,400 (a $600 increase). Single taxpayers and those who are married but filing separately have a standard deduction of $12,950, which is a $400 increase.&nbsp;</li>



<li><strong>Earned Income Tax Credit</strong>:<strong> </strong>The IRS has increased this amount to $6,935 for taxpayers with three or more qualifying children.</li>
</ul>



<h2>4 Small Business End-of-Year Tax Tips for 2023</h2>



<p>Small business owners have a lot of day-to-day responsibilities when it comes to managing the finances of their businesses. In addition to <a class="link" href="https://1800accountant.com/blog/small-business-bookkeeping-basics" target="_blank" rel="noreferrer noopener">small business bookkeeping</a>, you might also need to understand <a class="link" href="https://1800accountant.com/blog/small-business-payroll" target="_blank" rel="noreferrer noopener">how to run payroll</a> if you have employees. There’s also the aspect of <a class="link" href="https://1800accountant.com/services/small-business-taxes" target="_blank" rel="noreferrer noopener">small business taxes</a>, which can be quite complex for the average business owner.&nbsp;</p>



<p>When you <a class="link" href="https://1800accountant.com/blog/calculate-small-business-taxes" target="_blank" rel="noreferrer noopener">calculate your small business taxes</a>, the process will be easier if you follow some tax tips for small businesses. Consider the following practices to help ensure the process goes smoothly:</p>



<h3>1. Maintain Good Records</h3>



<p>Your tax prep would not go smoothly without concrete tax records. These records could help you calculate your estimated tax payment. Make sure you record your business expenses on a regular basis, regardless of the amount. Don’t wait until the end of the quarter or year to reflect on your spending on things like advertising or business-related travel. If you maintain detailed and accurate records and save related paperwork and receipts, you’ll have a much easier time deducting these expenses during tax season.</p>



<h3>2. Know Your Deductions and Credits</h3>



<p>Depending on the type of work you do, you may be entitled to a variety of tax deductions and tax credits. Self-employed folks and small business owners are often eligible to receive certain deductions and credits that sometimes get overlooked. It’s important to be aware of these items to <a class="link" href="https://1800accountant.com/blog/maximize-small-business-tax-deductions" target="_blank" rel="noreferrer noopener">maximize your savings</a>.</p>



<h3>3. Beware of Scams</h3>



<p>Don’t fall victim to scammers who try to take advantage of taxpayers through various sneaky methods. Some <a class="link" href="https://1800accountant.com/blog/common-irs-tax-scams" target="_blank" rel="noreferrer noopener">common IRS scams</a> involve criminals who impersonate the IRS, while other scams originate from the taxpayer who’s trying to avoid payment. The IRS releases an annual <a class="link" href="https://1800accountant.com/blog/irs-dirty-dozen-tax-scams">Di</a><a class="link" href="https://1800accountant.com/blog/irs-dirty-dozen-tax-scams" target="_blank" rel="noreferrer noopener">r</a><a class="link" href="https://1800accountant.com/blog/irs-dirty-dozen-tax-scams">ty Dozen list of scams</a> that are relevant to both taxpayers and tax professionals.&nbsp;</p>



<h3>4. Work with a CPA</h3>



<p>Hiring a Certified Public Accountant (CPA) to handle your small business taxes is perhaps one of the smartest steps you can take. CPAs stay well-informed about current tax laws and regulations, so you won’t have to worry about missing critical details or deadlines. Outsourcing this critical component of your business can also help <a class="link" href="https://1800accountant.com/blog/5-reasons-hire-accountant-help-small-business-taxes-year" target="_blank" rel="noreferrer noopener">save money </a>and allow you to spend time and energy on other important tasks.&nbsp;</p>



<h2>FAQs for Small Business Tax Planning</h2>



<h3>What is the best tax planning software for businesses?&nbsp;</h3>



<p>There are many options if you want to take the DIY route for your business taxes, but the best option is to work with an accountant or CPA. Your business may have unique needs, and a CPA will ask the right questions to ensure your taxes are filed correctly. A CPA will also help you maximize your deductions and credits so you’re not overpaying or missing out on tax savings.&nbsp;</p>



<h3>How do I calculate small business taxes?&nbsp;</h3>



<p>Unlike individual taxpayers who pay yearly, many small business owners must pay <a class="link" href="https://1800accountant.com/blog/quarterly-estimated-taxes" target="_blank" rel="noreferrer noopener">quarterly estimated taxes</a>. To do this, you’ll need to calculate a few different numbers, including your adjusted gross income (AGI), estimated total income, and taxable income. All of these will factor into your total estimated taxes, which you can divide by four to get your estimated quarterly tax payment.</p>



<h3>How much should a small business put back for taxes?&nbsp;</h3>



<p>Unfortunately, there’s no simple answer for how much you should save for paying taxes. Taxes will vary depending on your location and business structure. For example, a C-corporation will have a different tax rate than a sole proprietorship. These tax rates can range from 10% to 37%, but remember that tax deductions and credits will also affect how much you’ll need to pay.</p>



<h2>Plan Your Small Business Taxes with 1-800Accountant</h2>



<p>These end-of-year small business tax tips can help put you on the right track for 2023. However, it’s ultimately a good idea to consult with a <a class="link" href="https://1800accountant.com/services/small-business-taxes">professional CPA</a>. No two businesses are exactly alike, and it’s best to work with someone who understands the specific laws and regulations that will apply to your business.&nbsp;</p>



<p>The team at <a class="link" href="https://1800accountant.com/">1-800Accountant</a> can advise you on your tax obligations and ensure you maximize your small business tax savings.&nbsp;</p>

With tax season upon us, it&#8217;s time to prepare your tax documents checklist. Small business owners know that now is the time for tax preparation for 2023. Whether you’re a seasoned business owner or you’ve just passed your one-year anniversary, you know that there’s a lot of planning that goes into running a successful business. [&hellip;]

Person reviewing financial documents at a desk with a mug and glasses, overlaid with the text "end-of-year tax tips.

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4 Small Business End-of-Year Tax Tips for 2023

<p>As a small business owner, you'll have questions about your business, business procedures, and taxes. You may have entity-specific or business tax questions, making receiving the correct answers urgently.</p>



<p>When tax season arrives, small business owners will have questions but only a little time to receive proper answers, assistance, and next steps. Here are answers to small business tax questions that small business owners are asking.</p>



<h2>Top 10 Small Business Tax Questions</h2>



<p>Here are the top 10 questions and answers to common tax questions that small business owners have:</p>



<h3>1. Can I Use Scanned Copies of Receipts for Tax Purposes?&nbsp;</h3>



<p>Scanned copies of receipts are okay to save and submit for tax purposes, and the IRS allows this as long as your receipts are identical to the original receipts. Your scanned receipts should also contain identical information to your original copies.</p>



<p>If you experience a tax audit but have scanned copies of your receipts, you'll want to save these records. With an audit, the IRS may require you to submit paper copies of your scanned receipts.</p>



<h3>2. How Do Taxes Work with a Small Business?</h3>



<p>Small businesses will<a class="link" href="https://www.sba.gov/business-guide/launch-your-business/choose-business-structure" target="_blank" rel="noreferrer noopener"> file and pay</a> their taxes based on their business entity. Businesses can choose their tax year when they file taxes for the first time.</p>



<p>Federally:</p>



<ul>
<li>Corporations pay income tax on their profits, and their shareholders pay personal income tax from the corporation's dividends.</li>



<li>Partnerships and sole proprietorships pay personal income tax and self-employment taxes.</li>



<li>S corporations pay taxes as pass-through entities, and their shareholders pay personal income tax.</li>



<li>Sole proprietors pay both personal taxes and self-employment taxes.</li>



<li>Multiple-member LLCs can elect to pay taxes as a corporation, partnership, or S corp. Single-member LLCs can pay taxes as sole proprietors.</li>
</ul>



<p>Depending on where you operate your business, your business may also have local and state taxes. If so, you may also have to pay employment taxes and state income taxes.</p>



<h3>3. How Much Can a Small Business Make Before Having To Pay Taxes?</h3>



<p>A small business's exact amount before paying taxes depends on its entity. Corporations can use Form 1120 to determine how much they'll pay in taxes.</p>



<p>Other business entities, such as LLCs, partnerships, S Corporations, and sole proprietorships, have different considerations for determining their income. These entities require their business owners to report income on their personal income tax returns, which means you'll have both business and nonbusiness income on your tax return.</p>



<p>Independent contractors and sole proprietors will have to pay taxes if they earn $400 or more.&nbsp;</p>



<h3>4. What Business Expenses Can You Claim On Taxes?</h3>



<p>The IRS <a class="link" href="https://www.thebalancemoney.com/deductible-business-expenses-3192959" target="_blank" rel="noreferrer noopener">has two requirements</a> for what business owners can claim as their business expenses.&nbsp;</p>



<p>Business expenses must be both ordinary and necessary. Ordinary expenses are expenses similar businesses or trades commonly pay for, and necessary expenses assist you in doing your business.</p>



<p>You can claim considerable business expenses as tax deductions:</p>



<ul>
<li>Advertising</li>



<li>Automobile expenses&nbsp;</li>



<li>Entertainment and meal expenses&nbsp;</li>



<li>Maintenance and repairs</li>



<li>Home office expenses&nbsp;</li>



<li>Transportation expenses</li>
</ul>



<h3>5. What Information Does a Small Business Need For Taxes?</h3>



<p>Small businesses will need several documents to file their <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business taxes</a>. These documents include the following:</p>



<ul>
<li>Business assets and business expense information</li>



<li>Financial statement</li>



<li>Home office expenses for business owners using their home as their primary business site.</li>



<li>Vehicle use information if you’re seeking a tax deduction for business vehicles.</li>
</ul>



<h3>6. What Is The Easiest Way To Pay Estimated Taxes?</h3>



<p>The easiest way to pay estimated taxes is to use the Electronic Federal Tax Payment System (EFTPS). Businesses and individuals can use EFTPS to make estimated tax payments weekly, bi-weekly, monthly, or on a different schedule.</p>



<h3>7. What Is The Penalty For Not Paying Quarterly Taxes?</h3>



<p>The penalty for not paying quarterly taxes is 0.5% of the amount not paid for each month or part of the month that the quarterly tax remains unpaid. There's a maximum penalty of 25% for not paying quarterly taxes.</p>



<h3>8. What Will Trigger an IRS Audit?</h3>



<p>Although IRS audits are infrequent, there are red flags that <a class="link" href="https://aofund.org/resource/top-10-irs-audit-triggers-and-what-do-if-audited/" target="_blank" rel="noreferrer noopener">trigger an audit</a>. Small businesses may experience an IRS audit for:</p>



<ol>
<li>Undergoing significant changes in business expenses and business income.</li>



<li>Filing an incomplete tax return.</li>



<li>File a tax return with errors.</li>



<li>Mixing business expenses with personal expenses.</li>



<li>Not making a business profit for several years.</li>



<li>Not filing a tax return if a business experiences a financial loss.</li>



<li>Operating a business that deals with a lot of cash.</li>
</ol>



<h3>9. Which Receipts Can I Claim on My Taxes?</h3>



<p>As you collect your <a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/what-kind-of-records-should-i-keep" target="_blank" rel="noreferrer noopener">business receipts</a> throughout the year, it may become difficult to know which receipts to keep for taxes.</p>



<p>&nbsp;You can claim receipts related to the following:</p>



<ul>
<li>Expenses&nbsp;</li>



<li>Gross receipts&nbsp;</li>



<li>Purchases</li>
</ul>



<p>Receipts related to expenses will show costs your business incurs other than purchases. You can claim expense receipts, including:</p>



<ul>
<li>Account statements</li>



<li>Canceled checks</li>



<li>Cash register tape receipts</li>



<li>Credit card receipts and statements</li>



<li>Invoices</li>
</ul>



<p>There are additional receipts related to business expenses that you should keep to claim as a tax deduction. The IRS requires you to prove these expenses to claim entertainment, gifts, transportation, and travel.&nbsp;</p>



<p>Gross receipts are another receipt type you can claim on your taxes. You can claim gross receipts, including:</p>



<ul>
<li>Cash register tapes</li>



<li>Deposit information&nbsp;</li>



<li>Form 1099-MISC</li>



<li>Receipt books</li>



<li>Invoices</li>
</ul>



<p>Purchases are the last receipt type that you can claim on taxes. You may use information from your purchases to claim credits or deductions on your tax return from:&nbsp;</p>



<ul>
<li>Canceled checks</li>



<li>Cash register tape receipts&nbsp;</li>



<li>Credit card receipts and statements</li>



<li>Invoices</li>
</ul>



<h3>10. Who Has To Pay Quarterly Taxes?</h3>



<p>There are three groups of people who have to make <a class="link" href="https://1800accountant.com/services/quarterly-estimated-taxes">quarterly tax payments</a>:&nbsp;</p>



<ol>
<li>Corporations</li>



<li>People without enough tax withheld&nbsp;</li>



<li>Self-employed workers</li>
</ol>



<p>Corporations may need to pay quarterly taxes if they expect to owe at least $500.</p>



<p>Second, if you need more taxes withheld, you should make quarterly tax payments. There are two criteria the IRS has for who needs to pay quarterly taxes for those not withholding enough taxes, and you'll need to meet both requirements to pay quarterly taxes in this group.</p>



<p>The first criterion is that you'll owe at least $1,000 in federal taxes after adding your tax credits and withholding. The second criterion is that your refundable credits and withholding cover the following:</p>



<ul>
<li>Less than 90% of your tax liability for the current year</li>



<li>100% of your liability for last year</li>



<li>110% for taxpayers with an adjusted gross income of $150,000 for taxpayers filing individually, or $75,000 for taxpayers who are married and filing jointly</li>
</ul>



<p>Third, self-employed workers, including freelancers and independent contractors, should pay their quarterly taxes if they owe $1,000 or more in taxes.</p>



<h3>Work with Expert Accountants To Help Navigate Small Business Taxes&nbsp;&nbsp;</h3>



<p>Small business taxes encompass different requirements for different entities. Federal, local, and state tax requirements and multiple business entities make it critical to get your small business questions answered.<br>When you need to answer small business tax questions, it's best to work with experts. Work with the expert accountants at <a class="link" href="https://1800accountant.com/services/business-tax-advisory">1-800Accountant</a> for your small business tax needs.</p>

As a small business owner, you&#8217;ll have questions about your business, business procedures, and taxes. You may have entity-specific or business tax questions, making receiving the correct answers urgently. When tax season arrives, small business owners will have questions but only a little time to receive proper answers, assistance, and next steps. Here are answers [&hellip;]

Text overlay reading "common tax questions from small business owners" on a background of scattered paper slips with tax-related terms.

Common-Tax-Questions

10 Common Small Business Tax Questions Owners Are Asking

<p>Being self-employed brings with it a lot of independence. You get to make your own choices and set your own hours. You work when you want to work!</p><p>But for better or for worse, that independence also means a lot more responsibility. You’re operating your own small business, and as a result, you’re responsible for your own <a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">income taxes and self-employed deductions</a> in a way most working people aren’t.</p><p>If you’ve never paid or filed taxes as a small business owner before, there is a lot you should know before you get started. There are numerous ways you can bring down your overall taxable income and increase the money you get to take home. If you’re not taking advantage of these tax deductions for self-employed expenses, you'll be paying more than you should.</p><h2 class="wp-block-heading">Eliminated or Changed Write-offs for Self-employed Individuals from the Tax Cuts and Jobs Act&nbsp;&nbsp;</h2><p>Small business taxes can be extra complicated because of how frequently the laws change. The tax code can vary significantly from one year to the next, meaning you have to relearn everything all over again.&nbsp;</p><p>The 2017 Tax Cuts and Jobs Act changed a lot about small businesses; many deductions and credits were adjusted or removed entirely.&nbsp;</p><p>Here are a few <a class="link" href="https://www.investopedia.com/tax-deductions-that-are-going-away-4582165" target="_blank" rel="noreferrer noopener">tax deductions that changed or went away because of the TCJA</a>.&nbsp;</p><ul><li>Personal and dependent exemptions are suspended.&nbsp;</li><li>The standard deduction was increased significantly.</li><li>The child tax credit was increased.</li><li>Deductions for commuting expenses are more limited.</li><li>Job relocation moving expenses are no longer deductible except for active-duty military personnel.&nbsp;</li><li>Alimony expenses are no longer deductible and receiving alimony payments no longer counts as taxable income.&nbsp;</li></ul><h2 class="wp-block-heading">10 Self-Employment Tax Write-Offs to Use</h2><p>Here are ten valuable write-offs of business expenses for self-employed individuals you should include on your <a class="link" href="https://1800accountant.com/blog/small-business-tax-deductions-checklist">small business tax deductions checklist</a>.&nbsp;</p><h3 class="wp-block-heading">1. Qualified Business Income Deduction</h3><p>Every year, small businesses below a certain income level can deduct 20% of their qualified business income. QBI refers to your net income but excludes income related to capital gains, interest, or income earned outside the United States.&nbsp;&nbsp;&nbsp;</p><h3 class="wp-block-heading">2. Self-Employment Tax Deduction</h3><p>As a self-employed individual, you have to pay a higher percentage of your income into Social Security and Medicare, for a total of 15.3%. However, you can claim a deduction for half of that. 7.65% of your self-employment tax can be claimed as a business expense and not counted for your taxable income.&nbsp;</p><h3 class="wp-block-heading">3. Home Office Deduction</h3><p>Another significant source of savings is the <a class="link" href="https://1800accountant.com/blog/home-office-deduction">home office deduction</a>. However, simply working from home isn’t enough to claim this deduction. You must have a dedicated space in your home that is only used for your business, and it has to be a primary site for your work.&nbsp;</p><p>If you’re eligible for this deduction, you can claim a portion of all your home-related costs as business expenses. You can deduct a portion of your rent or mortgage and other important home repair costs in proportion to the space of your home office. All of that is in addition to the costs of any office supplies or goods you use exclusively for work.&nbsp;</p><h3 class="wp-block-heading">4. Health Insurance Premium Deduction</h3><p>If you’re not eligible for health insurance through your spouse, you can also count your health insurance premiums as a business expense. Effectively you are your own employer paying for your employee’s health insurance, so that cost should be paid with pre-tax income.&nbsp;</p><h3 class="wp-block-heading">5. Vehicle Use Deduction</h3><p>Do you frequently use your vehicle for business purposes? Commuting costs don’t count here, but other work-related travel costs can be deducted, either for a company car or your own personal vehicle.&nbsp;</p><p>To claim this deduction, you can either keep detailed records of your vehicle expenses or simply log the miles traveled for business purposes. The IRS has established a <a class="link" href="https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2023-business-use-increases-3-cents-per-mile" target="_blank" rel="noreferrer noopener">standard mileage rate</a> for tax purposes, and in 2023, most businesses can claim a deduction of 65.5 cents per mile for business, medical, charitable, or moving-related travel.</p><h3 class="wp-block-heading">6. Internet and Phone Bills Deduction</h3><p>How much do you spend on internet and phone bills? These may also be deductible expenses as far as they’re used for your business. For a home office or a personal phone that you also use for business costs, you can deduct a fraction of the total cost based on an estimate of your relative business use.</p><p>On the other hand, you might have a separate phone used only for work or even a separate internet subscription. In that case, you can deduct the full cost of those bills as necessary expenses for your business.&nbsp;&nbsp;</p><h3 class="wp-block-heading">7. Meals Deduction</h3><p>Under certain specific circumstances, you can deduct all or part of the costs related to meals or entertainment purchased as part of your work. If you take clients out for meals or bring food to your workplace to share with others, then those costs are 50% deductible.&nbsp;</p><p>There are also a few meal-related costs that can be fully deducted. To be 100% deductible, it must be food or entertainment provided as part of a party for the entire company at once, or it must be something officially included as compensation for your employees for whatever purpose.&nbsp;</p><h3 class="wp-block-heading">8. Retirement Plan Contributions</h3><p>Every year you’re permitted to deduct a significant amount of money for payments you make directly into your retirement plan. This allows you to defer paying taxes on that income until you withdraw that money later.&nbsp;</p><p>It would be wise to max out your deductible retirement contributions before the end of each year, especially if you’re likely to find yourself in a higher income tax bracket.&nbsp;</p><h3 class="wp-block-heading">9. Interest</h3><p>While the principal on many loans can’t be deducted, you can deduct the interest on loans, including your home mortgage, even if you don’t have a home office.</p><h3 class="wp-block-heading">10. Education</h3><p>The IRS sees continuing education as a regular and necessary part of the job. Any money you spend to help you do your job better or keep up with industry developments is money you can deduct for education expenses.&nbsp;</p><p>This also covers any fees you pay for professional publications or association memberships.&nbsp;</p><h2 class="wp-block-heading">Maximize Your Tax Savings With 1-800Accountant</h2><p>It takes serious dedication and know-how to efficiently utilize the tools available to reduce your taxable income and final tax bill.</p><p>It might seem overwhelming, but it doesn't have to be with 1-800Accountant in your corner. Let our <a class="link" href="https://1800accountant.com/services/small-business-taxes">experts handle your taxes</a> while you dedicate time and resources to growing your business. You’ll be able to rest easy knowing America's leading virtual accounting firm isn't leaving potential savings behind.</p>

Being self-employed brings with it a lot of independence. You get to make your own choices and set your own hours. You work when you want to work! But for better or for worse, that independence also means a lot more responsibility. You’re operating your own small business, and as a result, you’re responsible for [&hellip;]

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Top 10 Tax Write-Offs for Self-Employed Individuals

<p><a href="https://1800accountant.com/blog/prepare-file-small-business-tax-return"><span style="font-size: 11pt;"><strong>Filing business taxes</strong></span></a><span style="font-size: 11pt;">&nbsp;is an essential responsibility as a small business owner, but it can be complicated, especially if you're not prepared. One thing leads to another, and you can fall further and further behind.</span></p><p><span style="font-size: 11pt;">The good news is it's not too late to file a return for back taxes in 2026, even if you're past the due date for your tax return. The more significant challenge lies in filing back taxes without records.&nbsp;</span></p><p><span style="font-size: 11pt;">Preparing your tax return will be difficult if you don't have a complete accounting of your finances. How can you pay what you owe if you don't know all of the income you've received? Fortunately, you have options. Use this blog to learn how to file back taxes without records in 2026.&nbsp;</span></p><h2><strong>Why You Should File Back Taxes for Your Small Business</strong></h2><p><span style="font-size: 11pt;">There are several reasons to file your income tax returns, even if you are far beyond the deadline. Even late, it’s worth the effort to avoid what happens if you&nbsp;</span><a href="https://1800accountant.com/blog/what-happens-if-you-dont-file-taxes"><span style="font-size: 11pt;"><strong>don’t file business taxes</strong></span></a><span style="font-size: 11pt;">.&nbsp;</span></p><p><span style="font-size: 11pt;">If you don't file a return, the IRS will eventually file a substitute return based on its data to estimate what you owe. It isn't likely that the IRS will include every benefit and deduction you're eligible for, which would have reduced your tax liability. You will also surrender any possible tax refunds if you don’t file a return.&nbsp;</span></p><p><span style="font-size: 11pt;">There is also a failure to file penalty that you'll be responsible for paying. If you have unpaid taxes, that amount will grow each month you continue without filing a late return, for up to 5 months afterward.&nbsp;</span></p><p><span style="font-size: 11pt;">You should make every effort to catch up on unfiled taxes to claim your deductions and receive your refund.&nbsp;</span><a href="https://1800accountant.com/services/small-business-taxes"><span style="font-size: 11pt;"><strong>Filing your small business taxes</strong></span></a><span style="font-size: 11pt;">&nbsp;also helps ensure you've paid everything you owe, no matter how late you file. Unpaid taxes will rack up significant fines over time, and the IRS will eventually act to collect them on its own if you don't pay.</span></p><h2><strong>How Many Years Back Can You File Delinquent Taxes?</strong></h2><p><span style="font-size: 11pt;">The IRS will accept past-due tax returns. However, if you want to claim a tax refund or credit, you must file your return within three years of the original deadline.&nbsp;</span><a href="https://www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns"><span style="font-size: 11pt;"><strong>Filing past-due tax returns</strong></span></a><span style="font-size: 11pt;">&nbsp;aren't worth the effort if you go further back than that.&nbsp;</span></p><p><span style="font-size: 11pt;">You should file past taxes for at least the last three years to claim any benefits you left behind, ideally up to the previous six years. How many years you can file back taxes will typically depend on the data you still have from those years.&nbsp;</span></p><h2><strong>How To File Back Taxes Without Records</strong></h2><p><span style="font-size: 11pt;">You don't want to file alone, especially when you're missing significant records. You can file back taxes just like any other IRS Form 1040, U.S. Individual Income Tax Return.&nbsp; &nbsp;</span></p><p><span style="font-size: 11pt;">The IRS will accept your past-due federal tax returns as soon as you submit them. For state tax issues, you should look up your individual state's policies or speak to an&nbsp;</span><a href="https://1800accountant.com/services/business-tax-advisory"><span style="font-size: 11pt;"><strong>accounting professional</strong></span></a><span style="font-size: 11pt;">.&nbsp;</span></p><p><span style="font-size: 11pt;">If you don't have a good record of your finances over the period in question, however, it will be more challenging to figure out your tax bill. Here’s how to get started:</span></p><h3><strong>Collect Financial Records</strong></h3><p><span style="font-size: 11pt;">To file your return, the first thing you need to do to get started is to collect all the financial data you can find on the tax years in question. You may not have consistent or reliable bookkeeping, but there must be some clues or records you can refer to that will help you assess your tax liability.&nbsp;</span></p><p><span style="font-size: 11pt;">These are some of the most common sources you might be able to use to put together your past-due tax return:&nbsp;</span></p><ul><li><p><span style="font-size: 11pt;">Bank account and credit card statements</span></p></li><li><p><span style="font-size: 11pt;">Tax forms like W-2s and Social Security statements</span></p></li><li><p><span style="font-size: 11pt;">Receipts from business expenses</span></p></li><li><p><span style="font-size: 11pt;">Emails or paper records of transactions</span></p></li></ul><h3><strong>Requesting Tax Transcripts</strong></h3><p><span style="font-size: 11pt;">You might not find enough information to go into your records alone. Fortunately, the IRS also holds various documents and forms for at least three years. You can request IRS tax transcripts with IRS Form 4506-T to&nbsp;</span><a href="https://www.irs.gov/individuals/get-transcript"><span style="font-size: 11pt;"><strong>get your tax record</strong></span></a><span style="font-size: 11pt;">.&nbsp;</span></p><p><span style="font-size: 11pt;">There are a few distinct kinds of tax transcripts you may be able to request:&nbsp;</span></p><ul><li><p><span style="font-size: 11pt;">Transcripts of tax returns you submitted in a prior year</span></p></li><li><p><span style="font-size: 11pt;">A report on your basic filing status and taxable income according to IRS records</span></p></li><li><p><span style="font-size: 11pt;">A wage and income transcript brings together 1099s, W-2s, and any other relevant paperwork the IRS has received from other businesses or financial institutions.</span></p></li></ul><h3><strong>Work with Forensic Accounting Experts</strong></h3><p><span style="font-size: 11pt;">If you’re struggling and still don’t know how to file back taxes without W-2s or other records, you may need to contract with a tax professional or a team with specialties in forensic accounting. Forensic accounting specializes in investigating and reconstructing business activity without regular records.&nbsp;</span></p><p><span style="font-size: 11pt;">You want to be sure you get your tax return prepared correctly, so you want to work with professionals who know how to put the data together, maximize your savings, and get it done right to help&nbsp;</span><a href="https://1800accountant.com/services/audit-defense"><span style="font-size: 11pt;"><strong>defend you from a potential audit</strong></span></a><span style="font-size: 11pt;">.&nbsp;</span></p><h2><strong>How 1-800Accountant Can Help With Your Delinquent Business Taxes in 2026</strong></h2><p><span style="font-size: 11pt;">If you’re trying to file back taxes without records, you may need tax preparation help from the experts. When you trust 1-800Accountant, America's leading virtual accounting firm, our accountants can help file back taxes for your company and get you back on track with your bookkeeping obligations, ensuring smooth operations in the future.&nbsp;</span></p>

Filing taxes for your business is essential to your responsibilities as a small business owner, but it can be complicated, especially if you&#8217;re not prepared. One thing leads to another, and you can fall further and further behind on your taxes. Even if you&#8217;re past the due date for your tax return, it&#8217;s not too [&hellip;]

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How to File Back Taxes Without Records For Your Small Business

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