Is my worker an employee or a subcontractor?
When determining whether the person providing service is an employee or an independent contractor, information related to the degree of control and independence is considered. As a general rule, if you control what will be done and how it is done, the worker is an employee. In other words, if you tell the person when to report to work and how long to stay, if the worker uses your tools and equipment, or if you train the worker to perform work how you want it done, ther person is an employee. On the other hand, if you only direct the result of the work and not the means and methods of accomplishing the result, the worker is a subcontractor.
Is my vehicle tax deductible?
Business use of your vehicle is tax deductible. The deductible amount is based on the percentage of business use. The deduction can be calculated using either actual expenses (depreciation, fuel, repairs, insurance, and license tabs) or the standard deduction ($0.50 times total business miles). Commuting mileage from home to work in NOT deductible.
What is the difference between an expense and a capital asset?
An expense is an amount paid for goods and services necessary to operate a business and is deductible in the year it occurs. A capital asset is an item that is expected to have value to the business for more than one year. A capital asset usually has a higher cost and must be depreciated over its useful life. However, Section 179 allows a taxpayer to fully expense certain capital assets in the year of purchase, subject to limitations.
What should I do if I don’t have cash to make an estimated tax payment on time?
Estimated tax payments are required by self-employed taxpayers; they are "safe-harbors" based on the prior year tax liability. If you expect to still owe the tax at year-end, send the payment as soon as possible to avoid assesed penalties and interest.
When are my personal tax estimates due?
April 15, June 15, September 15, and January 15 (or the next business day if the 15th falls on a weekend or holiday). However, some people pay their 4th quarter state estimate in December in order to accelerate the deduction on Form 104 Schedule A.
