Taxes 101 for Small Business Owners

February 15, 2006

In this Issue

• Personal Note From India: Tax time, Updated job leads
• Featured Article: Taxes 101 for Small Business Owners
• Virtual Assistant Industry News: Industry News and Announcements

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===>Personal Note from India

Hi there,

I hope you’re doing well. It’s about that time… tax time that is. Tax season is here. Are you prepared? Have you been keeping accurate records? In this issue I want to share some tips and suggestions for you during this tax season and those to come. Be sure to read this week’s featured article “Taxes 101 for Small Business Owners.”

New job leads are up for grabs. You can view the latest job leads at: Free Virtual Assistant Jobs

Wishing you all the best,

India Jordan
Your Fellow Virtual Assistant
Virtual Assistant Business

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===>Featured Article

Taxes 101 for Small Business Owners

With tax season fast approaching, many small business owners are scrambling to get their books in order and all pertinent information to the person that prepares their taxes, if they don’t do it themselves. You should have at least a basic understanding of what is involved when it comes to your taxes. Here are some basic tips and suggestions that you can implement to help you with your taxes.

Accurate Record Keeping

One of the best things you can do on a daily basis to make your life easier when it comes time to do your taxes is to keep accurate records. Use some basic accounting software like Quicken or QuickBooks to keep track of business-related receipts, mileage and invoices.

Consider setting up a separate checking account and a separate credit card for your business-related expenses. It will make it much easier to keep track of business-related expenses that may be tax deductible. For example, your credit card interest may be tax deductible if you purchased items for your business.

Tax code can get quite complicated and changes from year to year. To make sure you take all deductions that are available to you, while at the same time not claiming anything that should not have been deducted, I strongly suggest that you consult with an accountant and lawyer.

To avoid owing a lot of taxes at the end of the year, make quarterly estimated tax payments. If you are worried about additional taxes, have your spouse take an additional amount out of his or her check to cover your tax liability.

Another option is to open a savings account and depositing 25 to 30% of each check or payment that you receive from a client to cover taxes. Not only will you ensure you have the money to pay your taxes at the end of the year, you will also be earning interest on this money instead of depositing it with the IRS for a year.

Below you will find some possible tax deductions. Please note that these are “possible” deductions. Not all of them may necessarily apply to you. Please consult with your accountant to find out what you can and can’t write off.

Possible Tax Deductions:

• office expenses
• mileage
• home office space
• home office repairs and decorating
• advertising/marketing
• percentage of:

o utilities
o mortgage or rent
o cell phone and/or home phone

• web hosting
• payment to independent contractors
• credit card interests on business accounts
• travel expenses including meals and entertainment
• real estate taxes on business property
• accounting and legal fees

India Jordan is the owner and editor of Virtual Assistant Business, a one stop resource for aspiring and current Virtual Assistants. She’s a Virtual Assistant with a passion for helping other Virtual Assistants succeed in business.

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===>Virtual Assistant Industry News

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