The self-employed are regarded as exotic in their needs. They are neglected. To begin with, the tax laws are written without them in mind, as if they make up a minor factor in American society -- even though they number more than 25 million! Much of the advice given to the self-employed is either wrong or inappropriate for their level of business sophistication. For example, the IRS defines a legitimate business expense as one that is "orginary and necessary" to your profession. But what is ordinary and necessary to a sculptor? ++++++ Over the river and through the woods to Grandmother's house goes Pat Personal Trainer. Gram just bought a color laser and it's the cheapest way for Pat to print his new brochures. He leaves Friday afternoon. The bus gets him there in time for dinner. He works at the computer all the next day until the wee hours. (He's sure these new brochures will get him lots of customers.) Very early the next morning he kisses Grandma good-bye and heads back on the bus. Pat was away from his home, for business, overnight. It was BUSINESS TRAVEL. Therefore he may deduct travel expenses. If graphic designer Victor Visual called his business, the "Double V Studio," most people would pay him with checks made out to his business name. If his bank does not allow both names--Victor Visual and Double V--on his account, he'll have to have an account in the name of his business in order to deposit his checks. The simple (and money-saving) alternative is for Victor to open a savings account in his business name, deposit checks into it, and then have the bank do an automatic sweep of the funds from his savings to his checking account whenever the funds reach a certain amount specified by Victor. Excerpted from Self-Employed Tax Solutions: Quick, Simple, Money-Saving, Audit-Proof Tax and Recordkeeping Basics for the Independent Professional by June Walker All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.
