Deducting internet and computer costs for your home-based business

Many small and home-based business owners use their home computer for both work and personal use.  As a result, many clients ask me, "Can I deduct my internet and computer costs if I use my computer for both my home-based business and for personal use"?

Yes, you can deduct a portion of your computer and internet costs.  You deduction is based on the percentage of time you use your computer and internet for your business. Technically, you should keep a log of your internet usage to determine how much is business and how much is personal, but that isn’t very practical for most people.

President’s Day Tax Carnival

The 12th Carnival of Taxes is up at Don’t Mess With Taxes.  As Kay mentions, it’s just a coincidence that the carnival coincided with President’s Day, but also fitting, since so many presidents have influenced our tax code. 

For tips on tax advantages of owning a home, Roth IRAs, and tax deductions, be sure to check out the carnival.

Where does credit card fraud take place?

Several tax law changes not included on 2006 forms

Be careful if you are preparing your own tax return this year; there are several tax deductions, credits and other provisions that are NOT listed on the tax forms.

The Tax Relief and Health Care Act of 2006 was passed in December 2006, after the IRS completed and printed the tax forms for 2006.  Fortunately, several tax provisions that were scheduled to expire were extended, and several new tax provisions were created by this tax act.  Unfortunately, since the IRS had already printed the tax forms for 2006, these new and extended tax provisions are not included on the forms.

Do you have to report your eBay earnings?

With the start of tax season, the question I keep hearing the most is ‘do I have to report my eBay earnings?’

If you sell items on eBay for a profit, then you are required to report those profits and you may owe income taxes on your eBay sales. It doesn’t matter if it’s just a hobby or if you are trying to build a business.

Generally, any income you receive from all sources is subject to income tax unless it is specifically exempt by law (hint: eBay profits are not exempt).

What happens to your credit score when you get married?

When you get married, you and your spouse will have some big financial decisions to make together, such as buying a car, buying a house, etc. 

It’s not unusual for spouses to have completely different credit scores when they get married.  So, how does one spouse’s poor score affect the other spouse’s good credit score?

One common misconception is that married couples have a joint credit score.  This is not correct.  Each of you will have an individual credit score.  The lower credit score will not affect the higher score, unless you apply for joint credit.

Can I deduct my mileage?

Many small business owners do a lot of driving for their business, whether it’s driving to client meetings, or whether it’s frequent trips to the office supply store or post office.

You are allowed to take a deduction for automobile expenses on your income tax return when your car is used for business purposes.  This includes driving to client meetings, other business (office) locations from your home office, trips to the office supply store, post office, your accountant’s office, etc.  As long as the trip is for business purposes, it is deductible. 

How much is that refund loan really costing you?

13 Most Overlooked Tax Deductions

Kiplinger.com had a great article about the 13 most overlooked tax deductions yesterday.  Here’s a recap:

1. Missing or incorrect social security number
2. State sales tax – this deduction was extended by the latest tax legislation, but it was left off the tax forms, so enter on line 5 of schedule A
3. $250 educator’s expenses – also not on the forms, so enter on line 23 of 1040
4. Tuition and fees deduction – also not on the forms (are any deductions listed on the forms this year!?!), enter on line 35 of 1040