Hello,

Got a quick question. Are expenses incurred by a small business startup compound on a personal standard deduction? My scenario is below:

-I’m employed (not self-employment, at an actual company) and rent an apartment
-Say I incur ,000 in small business expense this year for a SIDE business.

Is this ,000 write off in conjunction with the standard deduction (of around 5k for single)? So, in other words, can my income be claimed to be 15k lower? If my startup costs incur ,000 is there a reason for me to NOT do the standard deduction? It seems awfully stupid that standard deductions exist, as I would’ve kept my own money instead of spending it on all this crap…

So, my standard deduction is higher than my itemized deductions.

I have a sole proprietorship, however, and I HAVE to itemize because of it.

My sole proprietorship is a very small internet business, it’s not really income, it’s a hobby, but was told to claim it to not get in trouble with the big boys.

I was wondering if, when I do my taxes, I would be taxed on more of my income because my standard deduction is higher than my itemized?

I have had a very part-time photography business for the last six years. I’ve had a NOL every year because the income from the business is less than the amount I spend on equipment for the business. This year I’m having to reclassify my business as a hobby because it has not had a profit in five years. I’m not filing Schedule A Itemized deductions because my allowable deduction is limited to business income amount which was 0 which is much less than the standard deduction of 50. I’ve listed the type & amount of income from photography on line 21 of form 1040. Am I considered self-employed, do I need to fill out Schedule SE self-employment tax form?
Charles, Thanks, you answered a previous question of mine too.
Robyn, it’s comforting to have the advice of an expert. Thank you!
Bob, I have no mortgage or property taxes & I made less than K in 2008. I filled out a Schedule A & my total itemized deduction is 6 because of the 2% limit. In previous years I filed Schedule C & Form 4562. I would usually Section 179 anything that cost less than 0 & depreciate anything that cost over 0. I purchased over K worth of equipment in 2008. Now that I have most of the equipment that a professional photographer needs, I must classify my business as a hobby. It’s disappointing but now I know I need to work harder at making a profit if I’m gonna say I have a Photography Business. Thanks for your answer.

He prefers the optional standard deduction. For the taxable year 2006, below are additional data:

Gross business income 1, 500, 000
Gross compensation income 600, 000
Itemized Deductions 500, 000
Premiums paid on health ins. 20, 000
Prizes won in a billiard tournament 100, 000

What is the taxable income?
What is the tax due?

Is there any exception to the rule of not being able to use the standard deduction when filing separately when the other spouse filing separately itemizes? Or, can a husband (salesman with unreimbursed business expenses) file separately and itemize on a schedule A, and the wife (home business) file separately and itemize on a schedule C?

The owner of the company, is single and has no dependents. He uses the ,350 standard deduction in computing taxable income for 2007. The personal exemption amount for 2007 is ,400. This is his only source of income. Compute after-tax income if:

a. the company is a sole proprietorship, and the owner withdraws ,000 for living expenses during the year.

b. the company is a corporation, the owner is the sole shareholder, and the corporation pays out all of its after-tax income as a dividend to the owner.

c. the company is a corporation, the owner is the sole shareholder, and the corporation pays the owner a salary of ,950. This will increase the corporation’s business expenses to 9,950.

My buddy and I own an LLC (taxed as an S-Corp). Can you deduct business expenses (such as phone) and health insurance premiums AND the standard deduction?

Also, do distributions/dividends have to be distributed equally (if we each own 50%, per say) can he take 60%, and I take 40% of distributions?

Thanks in advance.

I own a small business (new business owner). I did my taxes for 2007 and 2008 but I just got letter saying there is a discrepancy in the paper work and to refile I claimed 0’s down the board…( they want me to Amend it) …I got the paper work A 1040…a 1040 SE and a schedule C…I didn’t make anything in 2007 but i spent 6000.00 on supplies and fixing up my shop on the schedule C and claimed that 6000 i put that on the form and claimed it as a loss but that form said to put that on amount on line 12 on the regular 1040… MY QUESTION IS…on the regular 1040 do I still claim the standard deduction?? DO I STill need the regular 1040 or just the1040 SE? Some how after i fill everything out it still says I owe money?? How an I still owe when I didnt make any thing and spent 6000?? HELLPPP!

My husband and I bought a rental property in September. Since we are new at this I am not completely sure what all is tax deductible. Our taxes will be done at HR Block. I am just curious for my own questioning. We have not had much expense in those months. We did spend money for paint, varnish, painting supplies, fire alarms, fire extinguishers, etc. our first month. After that it was mostly paying bills and the building payment. Also, when I tracked my mileage I tracked miles per trip I then used a trip calculator to figure the price I would pay for gas at the cost of gas that day for the specific amount of miles including my gas mileage. I read somewhere recently that it could only be deducted if you use a standard deduction is that true? Also, when we bought the building we were told to call the IRS and get a tax ID number so we did. Now when I spoke to my usual accountant at HR Block hes saying we file this with our personal taxes. Did we not need the tax number? Do we really claim it with our personal? I am a little baffled by this. I was always under the assumption business was filed seperate. Any info would be greatly appreciated.
also, we bought new appliances for the one unit. Is that deductible? I believe they are energy star.
also, I was married on july 17, 2008. what would my status be for my taxes?

… and say the tax cuts favored the rich when it fact the biggest tax rate cuts were on the bottom. 15% to 10% = 5% The top bracket only went from 36.5% to 35% = 1.5%. I agree it’s more for the rich in dollar amounts but it was part of a stratagy to phase in a flat tax wich includes raising the standard deduction so the POOR WOULN’T PAY ANY income tax. but because of the knee jerk reaction of liberals it wasn’t continued. The inbalance cant be blamed on Bush anyway because its been that way for over 40 years. What did the Dems do about it all the times they were in power? Bush’s tax plan got rid of a lot of tax breaks that favored the rich like business meals and limo’s. His plan also implemented new tax breaks for teachers, so they could take the standard deduction and still deduct their teaching supplys, and raised the doubled the child tax credit. If Al Gore had his way the bottom tax rate would still be 15% instead of 10%.
the fact that congress was over spending had nothing to do with taxes since government revenue increase after the tax cuts were implemented.
how dumb is jw.? ask your great grand father how long the tax brackets have been around and how much less the rich were paying. Clinton had nothing to do with the surpluss it was the Repub. congress that cut taxes. Azzawalli is a close 2nd, tax revenue did go up its a fact. (gov. accounting office) ignoramous
how dumb is jw.? ask your great grand father how long the tax brackets have been around and how much less the rich were paying. Clinton had nothing to do with the surpluss it was the Repub. congress that cut spending. Azzawalli is a close 2nd, tax revenue did go up its a fact. (gov. accounting office) ignoramous