How much money to claim small business for taxes?
Posted on 31 January 2009 by admin
I just started teaching piano in September. I haven't made much money, does anyone know what the minimum is to file as a small business?
Thanks!
Dear Tawn: You are in the eyes of the IRS a Sole Proprietor and if you make $400 or more you are required to file a tax return You will use Sch. C or Sch. CEZ, and the information entered on this form will go back to the 1040. See IRS Pub. 17 page 8. If you use your home for business (piano lessons) you can deduct some of your home expense. See IRS Form 8829. It is not uncommon for a first year business to show a loss on your Sch C. but the IRS will watch your business to see you are making progress toward becoming profitable and if not they will consider your endeavor to be a hobby.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provide. Click on my profile to read more.
Errol Quinn Enrolled Agent Master Tax Advisor
If it's your only income, $400.
If you have other income, $1.
References :
You must file tax return if your income is $400 or more.
You are self employed or independent contractor. You must file your tax return if your self employed income is $400 or more. You will report your income and expenses on schedule C or C-EZ (Form 1040). This income is subject to SE tax at 15.3%. Read: http://taxipay.blogspot.com/2008/04/tax-filing-by-self-employed-sole.html
References :
Dear Tawn: You are in the eyes of the IRS a Sole Proprietor and if you make $400 or more you are required to file a tax return You will use Sch. C or Sch. CEZ, and the information entered on this form will go back to the 1040. See IRS Pub. 17 page 8. If you use your home for business (piano lessons) you can deduct some of your home expense. See IRS Form 8829. It is not uncommon for a first year business to show a loss on your Sch C. but the IRS will watch your business to see you are making progress toward becoming profitable and if not they will consider your endeavor to be a hobby.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provide. Click on my profile to read more.
Errol Quinn Enrolled Agent Master Tax Advisor
References :
http://www.irs.gov/SchC Form 8829