I have not seen this topic discussed by the IRS, corporations and any scholars for that matter. I am currently developing this idea into what i hope will be a Pulitzer submission.

As we all know by doing research – Tax laws were written primarily to tax those who owned land, and businesses. Most of the employees did not get taxed until later when the IRS and Government grew larger because of the services they provide to the public. Instead of keeping the same structure in tax laws – they changed them into two sets of standards. One for Business and one for Individuals. However they differ so much. Most laws are written to protect and benefit businesses especially in employment. The tax laws also are written to benefit businesses not individuals.

So why not demand corporations accept contracts by all individuals who work in the corporate arena as LLCs so they can benefit from the tax laws [ operating expense deductions , ie - fuel, mileage, rent, utilities, mortgage, food, etc,] as business do, since – people who work do have operating expenses which takes away from their NET just like business are able to write off their operating expenses which subtract from their NET..Those who work in the services industry, like fast food, restaurants, and other jobs would have to structure those positions which allow for LLC employees. Those considered laborers etc..would be covered under the company and all taxes etc…be paid as in the original tax code by the business…when it first started…

My primary reasoning for this is – Business complain they have to pay employee [ taxes, benefits, IRA's etc.] and it costs them too much money. They also use this to thwart paying you more money as an employee eventhough in the end they take a good majority off their taxes. If individuals worked as an LLC – this would reduce corporates expenditures, and increase employees pay. It would also allow indivisuals to claim the write off of operating expenses not provided by the Corporation thus decreasing their taxable income [NET] and give them more money in their pockets each year. People who work as an LLC will have specific employment contracts, will be protected by the laws of business – which in fact are written better than employment laws…and puts more faith and competetiveness back into the system. Sure there will be more paper work on the LLC – however, once you get everything you need automated on a PC its a peice of cake. But look at the operating expenses you can write off.

The IRS still gets their tax base, corporations reduce tax liabilities and expenses – employees become operators of business entities which are more intuned to the laws of corporations. It will allow them more protections, both ways for corporations and LLC..

This would exclude those who work in Public Sector employment as they are not private entities and the laws apply to those government entities much differently.
And to address those who have never operated as an LLC..I currently am an LLC single member business owner and I have worked as an employee then changed to an LLC while working for the same employer…Let me make this clear before some of you make the mistake of saying it doesnt change anything…

Yes it DOES change how you are paid [ the amount] and how you file taxes. Once i started a LLC i was able to negotiate higher pay, like ,000 dollars more, and also got the write offs. Operating as a sole proprietor is not an LLC…Sole proprietor offers you no protections under business law or personal law and exposes you as just an employee…There is no difference between working as an employee or sole proprietor as they are the same…

An LLC offers you protection while working personally as you are not using your social security number, you will use your business tax ID instead for all transactions…All accounts, bills, everything is done under a Business Tax ID not SS#…
I thnk people are missing the point here – I am not running a shabbing business LLC nor am i working loopholes to circumvent the tax laws. What i am saying it – working as an LLC not as an employee for a company DOES in fact offer you better protection under the law and provides you better tax advantages. 1. you have a contract with the company, 2. You can negotiate higher wages. 3. You can deduct expenses like mortgage, rent, {percentages of use for business} fuel, and or mileage depending on your contract, 4. You can deduct the benefits you pay out for yourself, etc. All of them legal under an LLC. 5. Yes your tax is more, but is done pass through and you can get unemployment benefits from the state because you pay into it…if you lose your contracts. Health insurance everything can be paid by the LCC and deducted. Eventhough your tax rate is higher – in the end you make more because of legal write offs. Your net is still better than if you were an employee under corporate law.
Also – concerning taxes Employee versus LLC…As an employee you are taxed based on your Gross income – in a business you are taxed based on your net after expenses…So there is a huge difference in taxes and money…Business deductions are greater and based on NET versus individual deductions which are less and based on GROSS…plus you dont have to pay taxes twice under an LLC…

Please dont confuse being a Sole Proprietor with any of this as it doesnt apply…Sole proprietor does nothing for you as a person, business etc..

Sure as an LLC you must separate personal versus business expenses – but thats not hard to do…Just keep logs, all receipts, etc…on the PC. using quickbooks or Microsoft Accounting…The latter is the better…

Also find yourself a good business accounting lawyer who can easily set up everything for you…

It crazy what people dont know about how business laws and taxes really work. I think everyone needs to go buy a book on LLCs and read it…

Question about taxes and a car-I know that you can’t put an ad for a business on your personal car and claim the car as a deduction.

But what if your business is a car website/forum for a specific model of car? The site/forum shows how to do car maintenance, answers other’s questions, install power upgrades and aftermarket parts, making misc. modifications, and blogging about the experiences and daily driving mileage. The only income will be from google ads and bumper stickers and is very small.

I would only take a hobby and turn it into a business if I can claim the personal car as a business expense since the business IS writing, modifying, all about the car.

The expenses are the purchase price, depreciation, car parts/ modifications, gas, registration, insurance, parking space, tools to work on the car. The purpose is to add content to the site and are all exclusively for the website’s car. Even if I can only claim the cost of car mods and tools, this is over k/year.

ways government can help citizens who are strapped because of the gas price gouging ripoff:
1- Mileage tax deduction: based on odometer readings over a year. This will also help truckers, taxi drivers, & others who make their living by driving. This would be based on the IRS standard mileage allowance. That way, those who have to drive a long way to work or buy groceries will get some tax relief. It would also help the economy by helping those who want to go on a vacation trip.
2- Tax deduction if you buy a car that gets good mpg: 25+ (Not just Bugs and Echos)
3- Anyone who makes less than a million dollars and doesn’t own a car would pay no income tax.
4- Tuneups and other expenses to improve car performance and gas mileage would be deductible.
5- Those who take trains or buses to work could deduct fares.
6- Tax breaks for businesses who let their employees work from home as much as possible.
Can you think of others?

I just began a job working for a company as a bookkeeper with part-time hours. My work hours are classified as contract labor. I am the only (employee?) there so they didn’t want to set up payroll for one person. I agreed to pay my own taxes. I will issue myself a 1099 at the end of the year. Which box would I put my total income made? Can I keep tract of my commute mileage for a tax deduction? I will be driving approx. 30 miles one way. What about tolls? I will probably just take a lunch to work but if I eat out, how about meals as a deduction. Now to make things more complicated, I will be filing married, joint return with my husband and his self-employed business income. I do not have a business of my own. We have our taxes done by a CPA so there is no problem there. My problem is mileage b/c he has mileage too and we have one cell phone to share for my work and his work. Any help will be appreciated. I know to keep all receipts. Thanks in advanc

I made 95000 last year, I am single, no dependents, no house, I went to HR block last year and I got back a very small amount for my return. I use my personal vehicle for business about 70% of the time. I have logs of this information. I have a 401K and pay into bi monthly. I get paid a per diem while at work, but it seems to be below the standard for where I work. Any help would be greatly appreciated. Also, will I be able to get more money back from last year since HR Block didn’t advise me of any deductions such as mileage and per diem?

My husband uses his truck 99% for business. He drives all day long. The previous 2 years I used the mileage deduction and figured his actual business mileage to be deducted.The company pays for his fuel. This year, his company is doing something funky with reporting that cost of fuel. If they are paying for his fuel, isn’t he still able to use the mileage deduction? Mileage is not the same as doing the actual expense deduction. Mileage is "wear and tear" and "depreciation" on your vehicle. No one I work with knows. People need to understand taxes better.

I’m currently a college student and am getting back into freelance web design. I know that I need to report the income I make from it (I asked a question about it here: http://answers.yahoo.com/question/index?qid=20090617130930AATB9pX). What I need to know now is if I can do business under my own name? I would prefer to be able to deposit the checks to my personal checking account, much like my on-campus job, and not have to open a business checking account.

Also, again in regards to taxes, how exactly do I report this additional income? Do I report it as "other income" or do I have to report it as something else? And how do I include expense deductions (cell phone, computer, mileage, etc)?

and clothing on my taxes for my work. I am employed, not an independant contractor. I go to the location in my town twice a week, and travel 66 miles 3 days a week to another town. I don’t stay over night though. My FA told me that I can claim my meals, and haircuts and clothing costs as an expense for tax deductions. I thought you could only claim meals if you stay overnight? Can I really claim my haircuts and clothing? I don’t have a uniform, just a business casual dress code, and neat, kept appearance. Can someone clarify this for me? I already knew I can claim the mileage, but the other things threw me off.

What can I deduct from a 1099 of ,000? And what proof do I need for each deduction? Mileage log?….Phone bills?….business lunch receipts?…. what are the percentages on these things?
I have a w-2 for 43,000 and a 1099 side-job for ,000. I have my w2 under control, but this ,000, i haven’t paid taxes on it and want to deduct as much as possible? any good advice out there for me?

I accidently answered "no" when asked if I have evidence to support my personal vehicle standard mileage deduction for my business. Now I’m terrified I will have committed fraud and my refund will be taken. What can I do, help please!!
I do have evidence, I just accidently marked no. Will the IRS automatically disallow this deduction or am I setting myself up for an audit?