It’s outrageous! Did you know that the Alternative Minimum Tax (AMT) rules force you to pay taxes on your tax deductions! That’s right. The AMT even makes you pay taxes on the personal exemptions the regular tax law grants you for your children! Luckily, because you own a business, there is something you can do to protect yourself. You can use your business expenses to … [Read more...]
Hobbies
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Watch out for the dangerous “side business rules”
It’s no fun when your side business loses money. However there is a bright side. You can generally use your losses to offset other income or apply the losses to lower your income taxes. But be careful. If you don’t handle things the right way, the IRS might: Invoke the “hobby loss rule” Claim that you’re running your side business as a hobby Prohibit you from deducting … [Read more...]
How to avoid the IRS’s “hobby-activity” trap
If you’re running a second business and making a genuine effort to be profitable, the IRS is pulling for you. (They want you to pay taxes.) But if your second business was really created for the purpose of deducting personal expenses, you could be walking into a dangerous trap… the hobby-activity trap. You see, the IRS will define your pseudo-business as a hobby and attack … [Read more...]
How to beat the unfair “hobby loss” rule
A hobby can be a lot of fun. But not when the IRS gets involved. You see, when you’re engaged in what the IRS defines as a hobby, Uncle Sam can tax all your hobby income and at the same time disallow every penny in hobby deductions! But there’s hope! Thomas A. Gullion won more than $17,000 in tax benefits when the court ruled that his music-business tax-losses were fully … [Read more...]
How to get a deduction for your classic car
Do you drive a classic car in the course of conducting your business? If you do, here’s a fact you should know… Some important tax law changes now allow you to claim a fat deduction on your four-wheeled business asset! Of course, as always, the devil (and the IRS) is in the details and you have to know how to handle things correctly. We’ll show you how, and steer you in … [Read more...]