In this section, you will complete the following 9 sections:
- Tax Rates
- Automobile Expenses
- Business Use of Home
- Child Wages
- Deductible Medical Expenses
- Employees and Contractors
As you go through each of the sections, you will see your progress bar change. All questions have been answered once your progress bar is at 100%
The status of each section is identified by one of the following icons:
Not Completed: Completed:
Why is completing MyBusiness Setup important? Review the Introduction page and see how Deductr will not only prepare you for filing your taxes, but it will also provide you with your estimated tax savings throughout the year.
2. Tax Rates:
Information gathered will give you an idea of your estimated tax savings for the year.
From the perspective of income and expenses, in the start-up phase of your business, all you have is expenses. Each dollar of expense produces a dollar of business loss. These business losses can offset other personal income for taxpayers filing an individual or joint tax return. This creates an overall net tax savings if you have other income from which to offset your business losses.
Once you have your first dollar of income, you have proved that your business can generate revenue and you have moved past the start-up phase and are now in the growth phase. However, if you still have expenses that exceed your income, your business is still operating at a net loss. Just as it was in the Start-up Phase, those business losses can offset other personal income for taxpayers filing an individual or joint tax return. This creates an overall net tax savings if you have other income from which to offset your business losses.
When you have more income than expenses, you now have a net profit. Since you have profits, you will have additional taxes to pay on that net income. Since net income from your own small business generates two levels of taxes, income taxes and self-employment taxes, each dollar of expense generates an even greater level of tax savings. Tracking business expenses had a great value when you were in the start-up and growth phases of your business, but now for each dollar of expenses in the mature phase, the tax savings value is even greater.
This section will allow you to accurately report any start-up expenses for your business, which are treated differently than regular business expenses.
4. Automobile Expenses:
Specific information is required to file for an automobile deductions. Completing this section will ensure that you are prepared with the correct information, but it will also allow Deductr to estimate your deductible expense for the business use of your automobile based on information entered.
Complete this section to produce the Mileage and Vehicle Summary Reports that you can provide to your tax professional or CPA.
5. Business Use of Home:
Deductr uses estimates and select expense categories to calculate your home office deduction. Specific information is needed to complete these estimates.
If you use your home for business and complete this section, a Home Office Report will be generated that you can provide to your tax professional or CPA.
6. Child Wages:
If you employ a child under the age of 18, complete this section.
A Child Wages Report will be generated that you can provide to your tax professional or CPA.
7. Deductible Medical Expenses:
If you have a spouse that works for you in your business, you can deduct medical expenses from the business as "employee benefits." This has the effect of lowering both self-employment taxes as well as income tax. Visit this section for additional details.
Completing this section will produce a Medical Report that you can provide to your tax professional or CPA.
8. Employees and Contractors:
If you are currently paying employees or independent contractors, this part of the setup will have you add them to the system so you can properly categorize payments made to them, along with any applicable taxes. This makes paying employees through a payroll service easy, and for independent contractors, this makes processing 1099's at the end of the year simple.
Review all answers entered in MyBusiness set up here. If any changes need to be made, you can return to the specific section at any time.
New filing status? Buy a new vehicle for your business? Begin using an area of your home exclusively for your business? As we understand that your tax circumstances can, and probably will, change throughout the year, don't worry...we have you covered! MyBusiness Setup is designed to be changed at any time.
Prior to printing your reports, we recommend that you go through MyBusiness Setup and review each section to ensure nothing has changed throughout the year. Need to make a change? Just go to the applicable section and edit any answer, it's really that simple!
The instructions and guidelines in this setup and throughout the program are meant to be instructional in nature. For questions regarding how the tax laws can be applied to your particular circumstances, you should consult the advice of a tax professional.