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How To Use IRS Publications to Your Advantage


IRS Forms and Publications
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Most Americans (and even some non-residents) cringe when they hear a reference to the Internal Revenue Service (IRS). However, for those who want to start a home business or who are already operating one, IRS publications can be a valuable source of information, even for those who hire someone else to prepare their taxes.

15 Free IRS Publications for Business

Here are 15 free IRS publications that can be of considerable value to home business owners and the self-employed. Take advantage of the information provided by these IRS publications to improve your bottom line.

Difficulty: Easy
Time Required: As much or as little as necessary

Here's How:

  1. Publication 1066C, A Virtual Small Business Tax Workshop DVD - Provides interactive information and resources in a workshop format in 10 lessons that are subtitled in English, Spanish, and Mandarin Chinese. 3 hours and 43 minutes running time. You can order up to 5 copies free. And you thought IRS publications were limited to stodgy old recycled paperback leaflets!
  2. Schedule C - By printing out a Schedule C, you can see the categories you'll need to use when you file your federal income taxes. You can then make the categories in your bookeeping system parallel those in the form, which will make completing your tax forms at year end much simpler.

    Related topic:
    Learning from IRS Schedule C

  3. Publication 334 – Tax Guide for Small Business - Of all of the IRS publications, this one is a veritable "tax bible" of over 50 pages for small business operators who file Schedule C or Schedule C-EZ. Includes information on determining your business expenses, accounting periods and methods, figuring net profit or loss, and calculating your SE (Self-Employment) tax.

    Related topic:
    Learning from IRS Tax Forms

  4. Publication 15 (Circular E) Employer's Tax Guide – One of the more valuable IRS publications for those with employees. Includes information on who can be classified as an employee, handling family employees, withholding, unemployment (FUTA) tax, and new hire reporting.
  5. Publication 463 Travel, Entertainment, Gift, and Car Expenses – Includes information on foreign and domestic travel, travel for temporary assignments or jobs, meal expenses, gifts, and allowable car expenses, including both ways of calculating them – actual costs or by using the standard IRS mileage rates.

    2009 Allowable Mileage Rates
    • 55 cents per mile for business miles driven
    • 24 cents per mile driven for medical or moving purposes
    • 14 cents per mile driven in service of charitable organizations
  6. Publication 505 Tax Withholding and Estimated Tax – One of the IRS publications that is a MUST have for anyone who does not have federal taxes withheld from their payments. Includes information on who is required and who is not required to pay estimated tax, how to calculate each payment and how to make payments. Includes useful examples as illustrations in determining estimated tax payment liability.

    Related topic:
    Filing Estimated Taxes with the IRS
  7. Publication 535 Business Expenses – Topics on rents, interest, taxes, insurance, capitalizing assets, amortization, depletion, and bad debts. Essentially, everything you wanted to know about deductible and non-deductible expenses for your home business, this is one of those IRS publications that can really help you maximize your deductions.
  8. Publication 537 Installment Sales - This IRS publication includes information on figuring and reporting installment sales income.
  9. Publication 541 Partnerships - Provides information on forming and terminating partnerships and how partnership distributions are handled for tax purposes. Those who are mulling over whether to enter into a business partnership would do well to read this IRS publication to understand the federal tax treatment for partnerships.
  10. Publication 542 Corporations - Includes information on filing and paying income taxes along with accounting methods and periods, recordkeeping, and how startup costs are handled. IRS publications like this one can really help you understand the tax differences between partnerships, sole proprietorships and corporations.
  11. Publication 551 Basis of Assets – Includes information on calculating the basis of business assets, which is necessary for depreciation purposes and for reporting gains and losses on the sale and disposition of assets.

    Related topic:
    Home Office Tax Deductions

  12. Publication 557 Tax-Exempt Status for Your Organization – Details the rules and procedures you need to follow in order to apply for or appeal an IRS ruling on tax exempt status for your organization. These IRS publications are generally for non-profit concerns.
  13. Publication 560 Retirement Plans for Small Business - Includes information on Simplified Employee Pensions (SEPs), SIMPLE IRA and 401K plans, and setting up qualified retirement plans. Also includes useful worksheets for the self-employed in calculating how much income they can defer in a retirement plan. One of the more valuable IRS publications for retirement planning for the self-employed.
  14. Publication 583 Starting a Business and Keeping Records - Invaluable information for new business owners, including forms of business, employer ID numbers (EINs), accounting methods, an overview of business taxes, handling business expenses (including startup costs), business use of your home, car and truck expenses, and record keeping guidelines.
  15. Publication 587 Business Use of Your Home - One of the IRS publications that's an absolute essential if you have a home-based business or work from home. Explains how to qualify for and calculate the deduction, depreciating your home, what happens to your deductions when you sell your home that was being used for your business, business furniture and equipment, record keeping guidelines, worksheets, and examples.

    Related topic:
    Home Office Tax Deductions

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