Seeking help on this scenario. Have HELOC on the house we are living in. We borrow money on the HELOC to build another house and move into the new house. Turn the old one with the HELOC into a rental property. I am a realtor and actively manage this rental property as a full time professional. As part of my active business, I can deduct any losses that I have on the rental property – which are mortgage interest and property taxes minus rental income. Now the question is can I deduct the HELOC interest that was used for building my current primary home? What happens I pay off some of this HELOC debt and draw again for some other uses later on. Which means it is like an account where I can borrow and pay off – with interest deduction. Greatly appreciate any thoughts.
I believe when we made the house a rental there was a 0K HELOC and it was further increased to 0K. After that I paid off some, reduced to 0K.
All the initial 0K draw on HELOC was used for the new home construction.

but there’s no deduction if you’re self-employed and watch your own child? Technically, this is a business loss for me (though I don’t mind, obviously) because if I wasn’t watching my son, I would be freelancing during that time and earning more money.

Is there any way to "pay" yourself for childcare if you’re self-employed?
Edited – but I am "out" money – my entire salary from working full-time before I decided to stay home.
Okay – so if I never earned the money in the first place, I never paid taxes on it, therefore there’s nothing to "deduct" from my taxes. Still smells slightly unfair to me (in the sense that it penalizes SAH parents) but I understand.

A good friend of mine owns a Jani-King cleaning franchise and my wife has been employed by him for a couple of years. Starting last year my wife started doing it full-time. I have a couple of questions…

1. We have received about ,000.00 in income during 2007 and have not paid any taxes on that income. What kind of percentage of that income can we expect to pay?

2. Her boss provides all of the supplies, however we use one of our personal vehicle to go from job site to job site. I know she drives approximately 250 miles each week. Can we deduct the mileage as business expense as long as we know what the daily amount is (we have kept track).

3. Should I look at any other deductions?

I know there will be people that will say that we need to speak to an accountant, and we intend to. I am just looking for a little education before we meet with one.

Any assistance is greatly appreciated.
I should have clarified the section about my income. I work for an employer (city government) and our total household income was about 53K including the 12K we made as a contractor.

I have a very small business that is an Scorp…made absolutely no money …income is pretty much equal to expenses and I do not draw a salary. Once again I have put off till the last minute to file taxes. In reading some of the questions asked by others, am I correct in that I have to do this by March 15? (that was yesterday!!!!). I also worked full time for another company and have w2 forms for those jobs. I will be taking standard deductions since I don’t have enough to itemize. I am hoping I can just find a program online that will take me step by step. Oh… also have nothing that will be depreciated. Am I making a big mistake by trying to do this myself? help!

….are they talking about Income BEFORE deductions/taxes paid…

or are they talking about the bottom line on your 1040!????

say for example you have 0,000 in income on a self employment business…..but have 0,000 in expenses….is your "income" that they are talking about, the 0,000…or ,000????????

I have read that those with "incomes" over 0,000 are more likely to be audited….but what income are they talking about….gross…or net….after all expenses/deductions, etc??
I believe (I don’t have it here with me) but our AGI on our 1040 after everything was about ,000.

We have self employment, but we also both have full time jobs. Our losses on our self employment each year is almost always because of depreciation! if we didn’t have to add that in, we’d make a little!!!

I’m 20 years old and I’m a home maker as well as a full-time student at PSU. I occassionally photograph weddings for side money, but by the end of 2009 I think I will only have made ,100 from that. I receive 0 a month from my fiance, who lives with his parents, but IDK if that’s taxable or not. I pay for a few of my bills, but he pays for most of them. The reason we live together is because he’s saving up money by living with his parents for free so that we have the money for a downpayment on a house, but that’s irrelevant.

I figure I spend 0 in deductions for photography, as that’s my gas money, my clothes, memory cards for the customers, etc. I do not tax my clients so I guess I’m going to have to pay like when I file for that. I also know nothing about taxes or businesses, so I don’t really have a business…I just do it. IDK if that’s illegal or… what I’m supposed to do. I don’t want to do anything illegal, so that’s why I’m going to try to claim this income in 2010.

Now I’m wondering what the minimum income is in order to file taxes, in order to claim head of household, in order to claim the earned income tax credit, that child credit, etc. I almost bet that my mere ,100 or so is not enough…so should I get a ‘real’ job before the end of the year to make just enough money to get a good chuck of money in April? If so, how much should I try to earn so that I make the bare minimum requirements and can get the credits?
Do they cut me a break for being a full-time student & ’single’ mom? Probably not.
Taxes are so confusing.
**The reason we DON’T live together….
Thanks for all of the really in depth and helpful answers. It’s going to be so hard to choose a best answer!

And to Twitter Bird. I’d love to punch you in your face. What makes you think I’m on welfare, get cash assistance, or any of that?

Sure, I have medical but I don’t even go to the damn doctor. I don’t get cash assistance or anything else. I don’t get child care because I take care of my kid and have been breastfeeding for over a year. What do you do? Probably live with your mommy or get abortions at 15. I love how people like you talk so much over the internet but if I were to ever see you in person you wouldn’t dare assume crap like that. So to conclude – F*** YOU!

My husband is a catastrophe claims adjuster and gets paid commission as an independent contractor. I understand business deductions, etc.. for him. Our 19 year old son (who is NOT a full time student and NOT a dependent) is working with my husband. How is the best way to pay him without getting all of us in trouble with taxes? We are providing room and board for him but need to pay him for his time as well. Would it be better for him to pay rent and buy his own food so he has deductions as an independent contractor also? I’m really confused and concerned about doing this the right way. Any help or suggestions will be greatly

How should I file my 2009 taxes in order to have the greatest chance of being approved for a home loan? I have been self-employed since 2004 but I was also employed full-time for another company until 10/07. My 2004-2005 taxes were filed under an LLC S-Corp. 2006 taxes under sole-proprietorship and W2 for my full-time employer. 2007 & 2008 I used Turbo Tax Home & Business as a sole proprietor. I’m going to a reputable accountant, tax consultant, and mortgage broker next week for more advice but would like to prepare myself with any other questions before doing so. My business has made a profit since I started it in 2007 but as many business owners do, I’ve had enough deductions to show very little profit. I’m concerned the banks won’t like this. I can show a great profit for 2009 if I need to in order to get a loan as my company really does make a good profit. I hope this makes sense. Does anyone have any answers that might help. I currently do my taxes myself but will a lender want a professional office to have completed my taxes? Thanks

In 2005 I loaned money personally to a Canadian business and lost all of it (the company went bankrupt before it could repay the loan). At that time I was employed full time in another job (and still am today). My question is are there any deductions I can make for the money I lost on that investment from the regular income I make? It seems totally unfair that I have to pay so much income tax now based on my salary when in fact I LOST so much money in my investment.

In 2009, I worked full-time for my current employer and received a W-2. I also received a 1099 for about ,000 that was technically a loan from the previous company; when I couldn’t repay the loan they issued the 1099. I received commissions from the previous company in 2007 and 2008 and deducted business expenses in 2007 and 2008. I did not have business expenses in 2009 because I am now otherwise employed full-time. Am I stuck reporting this as income with no deductions at all? Of course, this means that I owe taxes. Hope this makes sense and thanks in advance for any advice or ideas.