Tax time, so make things up as you go

LIFE may be what you make it, but when it comes to tax returns it is more a case of making it up. This is an important point to remember with a Tax Office that invents ways to charge you for things that you didn't do, but might have. Here are some words that might have meant something, but don't.

Read More Article...

10 Tax Tips for the Self-Employed

Technology and the ease of telecommunication have prompted more consultants, coaches, contractors and freelancers to take business matters into their own hands. Self-employment is no longer a means of making some extra money but a full-time career, and many such full-timers are punching their own time clocks and making excellent incomes.

The self-employed have unique tax concerns. Below are ten helpful tax tips to help lessen Uncle Sam's tax bite:

1. Keep very good records: Unlike a large company in which someone is hired to maintain records of all income and expenses, it is up to you to keep very good records, save all receipts and be able to support your deductions.
   
   
2. Office space: Whether you have a separate office facility or are using a portion of your basement or a converted den, you can deduct the percentage of your home used exclusively for business purposes. Take this percentage off of your mortgage or rent payments as well as your utilities. If you have a phone exclusively used for business, deduct those phone bills.
   
   
3. Don’t forget business expenses: Keep receipts and good records of business travel and other expenses including office supplies, postage and shipping costs, dues, subscriptions, and anything else business-related, including computer software for your business and upgrades to your system.
   
   
4. Deduct child care costs: There are allowable deductions for daycare, nanny care, babysitting and any other type of childcare provided while you are working. Take the deductions allowable.
   
   
5. Set up a retirement plan: You should consider setting up a self employed qualified retirement plan (i.e. SEP IRA) not only for tax purposes but for the same of saving money for your retirement years. If you wish to start with more than $2,000, you can opt for a Keogh plan, which allows you to put away more into tax-deferred savings for your retirement.
   
   
6. Employ family members: You can deduct medical expenses for your entire family by employing them legitimately.
   
   
7. Defer income if necessary: Being self-employed, you can alter your billing slightly to defer income if you see yourself heading into a higher tax bracket.
   
   
8. Get money back from FICA: Being self-employed, you pay both the employer and employee portions of Social Security tax. You can, however, deduct half of these payments on your 1040 form.
   
   
9. Increase expenses if necessary: Just as you can elect to defer income, if you see that your income is high, you can make many more year-end business purchases to add some tax deductions before December 31st.
   
   
10. Get the right help: Look for tax help from someone who is familiar with self- employment, since your needs will differ from those of a company.
    

Read More Article

Chance to fix tax in the emerging world

WE have a magnificent opportunity to reform the tax system. Not simply to make it better in general terms, but to design it specifically for the world emerging in this new century.

Now it's always a dangerous vanity to assume you can predict the future. But it's not unreasonable to suggest that China and its economic growth are going to be front and centre of developments over the next decade or two.

All sorts of developments. Whether we are thinking China as the benefactor continuing to enrich the "Lucky Country", or as the planet-killer turning our coal and iron ore into carbon. In more ways than one, it might be said: I have seen the future, on my TV last night.

I'd suggest we've never previously had the opportunity to see quite so, if you'll pardon the word in this context, clearly into the future before. And certainly not at those points in our history of great tax change.

Read More Article...