Hi there! I am currently kicking myself…I’ve REALLY made a mess of my finances and record-keeping. See, I’m over 18, and yet this is the first time I’ve ever tried doing my taxes myself. in the past it’s been 95% my father doing the work, 5% me running around, confused, trying to find forms he says I need and that I don’t remember getting but must have put…somewhere. Now, I highly doubt I’ll ever meet any of you in person, so your opinions really shouldn’t matter, but before I go into this next part I feel compelled to just add here that i am NOT an idiot…well…not usually. When it comes to finances, though, I’m finding that general rule of thumb just doesn’t apply.

So here’s the story. I’ve always been pretty entrepreneurial, doing some freelance writing, ebay selling, babysitting, event planning, stuff like that. For 2009, though, my primary income, in addition to waitressing, was 1) babysitting and 2) advertising/marketing writing–to be specific, working on commission to sell stuff for folks. I kept TERRIBLE records (i.e. none), not because I was trying to be dishonest or piss of the IRS, but because I just didn’t think about it. So you can imagine what a disaster my trying to file this year has been! The only good records were from the waitressing job–about k–which has been the majority of my income. Other tax form areas I saw and for which I REALLY wished I had better info: medical expenses and charity. If I’d kept better records for both, I think taxes could have been SIGNIFICANTLY less than they turned out to be (about k total (federal and state), but even more–about 00–before I fix the error i made when sending in the first return. I think this is called an amendment…will this increase my chances of an audit?)

I also found out I’m supposed to pay quarterly estimated taxes, which I will start doing as soon as i get the error straightened out.

So here’s my basic question. Starting now through the end of the year (and beyond, of course:)), I plan on keeping very good records. I’ll be keeping track of:

1) medical expenses
2) charity work/donations

For these I’m confused about several things. First, the standard deduction? I heard I should usually take this for medical and charity, and that medical has to be at least 7.5% of income to qualify (which mine always is).

Then there’s the ever-intimidating:
3) Business finances.

As I understand it, I am considered to "own" two different businesses. One is babysitting (which I do in the family’s home), the other, "advertising/marketing services."

For babysitting, the kids live a quarter mile from me, so I’m not planning on trying to figure out deductions related to driving. what I’m planning to do in for this is just record each time I get paid (day and amount), and my expenses (almost all of which are me buying stuff for the kids during the day–the parents reimburse me for those when I get paid, so I’ll just make a note of them.)

For the writing/advertising, though, it gets a bit more complicated. Sometimes I take on big projects for folks who are losing their homes and need everything out by a specific date. For instance, last month I did a 3 1/2-week job for a guy who owned a four-bedroom house, everything still inside. I coordinated estate sales, private sales, listed stuff on craigslist and in different forums, etc. The guy lived almost 30 miles away, and I was constantly driving back and forth to meet potential buyers. On several occasions I also had to hire folks to help with the sales when I couldn’t be there at a specific time. There were lots of miscellanious expenses, etc. and some people we even paid in "stuff."

What I’m planning to do for this second biz from now on is to record each time a sale is made, what my commission is (if it’s not something I bought to re-sell), and what my expenses are. I’ll also try to log mileage as it occurs.

As for other deductions, I think it might be a good idea to just leave those alone, because almost everything I use for my business (computer, car, etc.) is also for personal use. So that whole "home office" deduction would definitely not apply, because my "office" is the computer in my bedroom (and I don’t pay rent), and my "inventory," when I’m buying and re-selling rather than just working on commission, is just piles of whatever stuff it is I’m marketing.

When it comes time to file those 2010 taxes, is this going to be pretty much the majority of what I’ll need? Other than the w-2 from my waitressing job and the (miniscule) statement from my stock shares, have I covered everything I’ll need? and if not, what else should I be aware of? I want to make sure NOTHING like this EVER happens again!!!

Thank you so much for any input you can provide!

So… last minute taxes, coz I’ve been putting it off for fear of the headache I’d get (and am getting).

I’m self-employed, and went through and deducted all business expenses (rent for home office space, computer stuff, stationary, supplies, etc, etc…). I also deducted my insurance premiums as a business expense, but then did other medical expenses as personal expenses.

However, not having many personal deductions, my medical expenses don’t seem to be enough to take any deduction, and being rather poor (oh woe is me) I’d prefer deducting medical expenses as a business expense if I can… can I? And if so, where do I do that? I only see a section for insurance… not misc. medical expenses.

Thankyou so much!!!
Nothing’s paid with credit card… all debit/bank card, and I have the bank records and receipts for everything. No interest. I don’t even have any credit cards.

My medical expenses exceed 7.5%, but it still won’t let me deduct them as those are pretty much the only personal expenses I have (most everything is business, as I work from home, so can deduct portions of utilities, rent, phone, internet, etc…) so I don’t have enough personal expenses total to get any deduction apparently (?).

I don’t make enough for them to bother auditing me… they’d be spending more to audit me than they’d get back (if they got anything back, as I have receipts for everything and they’re all legit).

Basically, all misc. medical expenses are through insurance (what insurance wouldn’t cover, etc…) which IS business, so…???

Ugh.

If anyone could further clarify I’d appreciate it (I realise I’m probably arguing a moot point, but hopefully someone can point that out?)! Thanks!!!
The verdict: taxes are way too confusing. Bah.

Thankyou to those who tried to help! I appreciate it.

I did a bit of sleuthing, and according to "Topic 502 – Medical and Dental Expenses" on the IRS’ website, I CAN deduct misc. medical expenses on " Form 1040, Schedule A". And I did… and it helped a lot. The info is here in case anyone needs it in the future: http://www.irs.gov/taxtopics/tc502.html

Cheers, and thankyou!

Off to the 24 hour post office to avoid the hoards tomorrow (ugh!)!
Kathykoul… thank you, but it’s already been clarified. I checked online (one of the links listed) and out of nervousness called the IRS after sending out my taxes (and was on hold for like an hour) and they verified that I can, in fact, take them as business expenses since I’m self-employed.

Turbo Tax tells me "We don’t see a health insurance deduction in your return for 2009. Since you own a business, you can write off your health insurance premiums as long as you don’t have coverage available through an employer."

We have retiree health insurance through my FORMER employer. Does that count? Do I get a separate write-off for health insurance premiums since I have some self-employment income (which exceeds my premiums), or do I add it on Schedule A to other medical deductions, which must exceed 7.5% of AGI before I get any deduction?
The former employer pays around 45% of the total cost of health coverage (not taxable to me), and I pay the other 55%. I want to know if my out of pocket share is fully deductible, or only on Sch. A when combined with other medical expenses.

FOR AGI deductions reduce AGI, the importance of classification is because the AGI is used for establishing limits on certain deductions FROM AGI such as medical expenses, education expenses, property taxes, charitable contributions, and interest found in the itemized deductions. Generally, deductions FOR AGI are related to business expenses while, deductions FROM AGI are personal in nature.

I was told this is is plan for healthcare…………..It is time to take back our health care. This is why I support:

Making all medical expenses tax deductible.
Eliminating federal regulations that discourage small businesses from providing coverage.
Giving doctors the freedom to collectively negotiate with insurance companies and drive down the cost of medical care.
Making every American eligible for a Health Savings Account (HSA), and removing the requirement that individuals must obtain a high-deductible insurance policy before opening an HSA.
Reform licensure requirements so that pharmacists and nurses can perform some basic functions to increase access to care and lower costs.

Additional bills he sponsored:
(They reduce health care costs)

HR 3075 provides truly comprehensive health care reform by allowing families to claim a tax credit for the rising cost of health insurance premiums. With many families now spending close to 00 or even more for their monthly premiums, they need real tax relief– including a dollar-for-dollar credit for every cent they spend on health care premiums– to make medical care more affordable.

HR 3076 is specifically designed to address the medical malpractice crisis that threatens to drive thousands of American doctors- especially obstetricians- out of business. The bill provides a dollar-for-dollar tax credit that permits consumers to purchase "negative outcomes" insurance prior to undergoing surgery or other serious medical treatments. Negative outcomes insurance is a novel approach that guarantees those harmed receive fair compensation, while reducing the burden of costly malpractice litigation on the health care system. Patients receive this insurance payout without having to endure lengthy lawsuits, and without having to give away a large portion of their award to a trial lawyer. This also drastically reduces the costs imposed on physicians and hospitals by malpractice litigation. Under HR 3076, individuals can purchase negative outcomes insurance at essentially no cost.

HR 3077 makes it more affordable for parents to provide health care for their children. It creates a 0 per child tax credit for medical expenses and prescription drugs that are not reimbursed by insurance. It also creates a ,000 tax credit for dependent children with terminal illnesses, cancer, or disabilities. Parents who are struggling to pay for their children’s medical care, especially when those children have serious health problems or special needs, need every extra dollar.

HR 3078 is commonsense, compassionate legislation for those suffering from cancer or other terminal illnesses. The sad reality is that many patients battling serious illnesses will never collect Social Security benefits– yet they continue to pay into the Social Security system. When facing a medical crisis, those patients need every extra dollar to pay for medical care, travel, and family matters. HR 3078 waives the employee portion of Social Security payroll taxes (or self-employment taxes) for individuals with documented serious illnesses or cancer. It also suspends Social Security taxes for primary caregivers with a sick spouse or child. There is no justification or excuse for collecting Social Security taxes from sick individuals who literally are fighting for their lives.
So in other words he has no healthcare plan or else he is lying through his teeth.

I am a 1099 worker (I am pretty sure I am an employee, but that is a different saga altogether) who has been working for this company for over two years and has always paid her "self-employment" taxes. For two years in a row I have used TurboTax and shelled out a hefty sum to get the "Business Suite" editions. And, my tax bill has never been less than ,600 for a ,000-,000 gross annual income. However, some of my coworkers (who make more than I do per year) use tax preparers who somehow are using the same deductions I claim (auto, medical expenses, school, etc) and yet their tax bills are somewhere around 0 for a larger annual gross income than mine. I am wondering how in the world this is possible, and if it is possible for me to use a tax preparer to somehow amend my last two years’ returns and get my money back.
Please, only people who actually know about this stuff and not just people guessing or being bored and making smart alecky comments. Much appreciated!
As for you, with the "canned response" which is prefaced with a needlessly abbrasive and insulting opener, I am pretty certain I will get fired if I do the SS-8. And seeing that I only make K a year, I don’t really have the time and resources to be unemployed while I go through lawsuits and whatever else. The job market, especially here, sucks and I have not been able to get a new job after aggressively trying for six months. So you can take your canned response and shove it.

things like marriage status, you can deduct hobby expenses but not medical expenses (unless its over 2% of your income)
business can deduct their legal expenses even if they’re are at fault, but an individual can’t deduct theirs even if they are aquitted. You have to make a choice between taking the standard deduction which is less than half the poverty level or itemizing your deduction. The tax is progressive until you get to about a million dollars then suddenly its a flat tax. If your spouce dies you suddenly have to pay higher taxes. I could go on. I’d like to hear some horror stories of other countrys tax code.
another one i just had to add. Earned inocome is taxed but unearned isn’t
I have read the last years tax code and the year before it doesnt say anything about income from a hobby just expenses. If I’m wrong about unearned income then George Bush and Al Gore must be wrong for all there talk about raising the taxable minimum from 1 million to 2 million.
if you are refering to gambling winnings, well you still have to place a bet so its not really unearned but you can deduct your losses but only in the year you lost them.
the problem is the stupid tax code makers even list capital gains and interest income as unearned income.

I have a home based business. Let’s say that I purchase a computer that is needed for the business. I know that this is considered a business expense and is tax deductible. Do I need a certain amount before they can be taken off taxes? For instance I know you have to have a certain amount of medical expenses before you can deduct them. Is it the same for business expenses?

I am currently a contractor and will file a schedule c with my taxes. Next summer I am going to quit my day job in order to home school my daughter. I will only be working part time but would like to purchase medical insurance and look into tax deductable options for medical expenses, something similar to a section 125 that employers offer. What do I need to do to get these kinds of deductions/options

Are there any tax deductions made available to HIV+ people or people living with AIDS? Specifically in relation to medical expenses, etc…?