Tax Power for the Self-Employed: Straightforward Advice from an Expert

Tax Power for the Self-Employed: Straightforward Advice from an Expert

by James Janice Parker


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Product Details

ISBN-13: 9781572484573
Publisher: Sourcebooks
Publication date: 11/01/2004
Pages: 261
Product dimensions: 7.02(w) x 9.00(h) x 0.66(d)

About the Author

James O. Parker has repeatedly encountered clients who were somewhat bewildered by our country's tax laws, having been a practicing attorney for over twenty-five years. Calling upon his twenty-nine years as an educator at Christian Brothers University in Memphis Tennessee and being a small business owner himself for over forty years, he set out to take some of the mystery out of the tax code. His first book, Tax Smarts for Small Business, was written with the over seven million owners of small businesses in the U.S. who operate through formal business entities in mind. His latest effort, Tax Power for the Self-Employed, was written to offer tax guidance to self-employed individuals, a group that now exceeds fifteen million in the U.S.
A former U.S. Marine and community advocate, he possesses both a Masters of Arts in Economics and J.D. from the University of Memphis, as well as an LL.M. from Emory University in Atlanta, Georgia.
A frequent speaker on tax topics, business succession planning, and small business development, he continues to advise others on the importance of tax planning.
Mr. Parker lives with his wife, Linda, in Germantown, Tennessee.

Table of Contents

Section 1Making Money
Chapter 1Self-Employment Income3
Self-Employment Tax vs. FICA
Taxable Income Sources
Nontaxable Income Sources
Chapter 2Hobby Income and Loss15
Deductions Available for Activities not Engaged in for a Profit
Activities that are Presumed to be Engaged in for a Profit
Combining Activities in Order to Qualify for the Presumption
Proving a Profit Motive when the Presumption does not Apply
Applying the Hobby Loss Rules to Business Entities
Factors that Qualify an Activity as a Trade or Business
Chapter 3Phantom Income31
The Tax Consequences of Increases in Inventory
Tax Consequences of Equipment Purchases
Tax Consequences of Using Profits to Buy Out Other Owners
Tax Consequences of Using Profits to Make Principle Payments on Debts
The Tax Consequences of Using Profits from a Trade or Business to Acquire an Additional Trade or Business
Most Common Sources of Phantom Income
Section 2Saving Money
Chapter 4Business Deductions for the Self-Employed49
Business Deductions
Qualifying to Take Business Deductions
Some Specific Business Deductions
Business Deductions that are Subject to Special Limitations
Common Business Deductions
Chapter 5In-Home Office Expense Deductions83
Uses that must be both Exclusive and Regular
Uses that must be Regular, but not Exclusive
Expenses Eligible for Home Office Deduction
Drawbacks to Taking a Deduction for Business Use of a Residence
Special Rules Concerning Deduction for Business Use of a Residence
Limitations on the Home Office Deduction
Chapter 6Deductions for the Cost of Goods Sold99
Chapter 7Non-Business Deductions Available to Self-Employed Taxpayers103
Non-Business Adjustments for Adjusted Gross Income
Moving Expenses
Tuition and Fees Deduction
Deduction for One-Half of Self-Employment Tax
Self-Employed Health Insurance Deduction
Deductions for Payments to Retirement Accounts
Non-Business Deductions for Adjusted Gross Income
Chapter 8Deductions from Adjusted Gross Income123
Itemized Deductions
Schedule A Itemized Deductions
Chapter 9Exemptions151
Personal Exemptions
Exemptions for Dependents
The Phase-Out of Exemptions
Chapter 10Federal Income Taxes and Common Tax Credits159
Regular Federal Income Taxes
Alternative Minimum Tax
Steps in Determining a Self-Employed Taxpayer's Federal Tax Liability
Tax Credits
Personal Credits
Most Common Tax Credits
Chapter 11Retirement Planning for the Self-Employed183
Individual Retirement Arrangements
Roth IRA
Simplified Employee Pension Plans
Other Retirement Plans
Tax-Deferred Retirement Options Available to the Self-Employed
Section 3Paying Money
Chapter 12Tax Law Compliance by the Self-Employed197
The Duty to Make Estimated Tax Payments
The Duty to Withhold Taxes from Workers' Earnings
Fulfilling the Duty to Withhold Taxes
Payment of Withholding Taxes
Civil Penalty for Noncompliance
Filing Appropriate Returns
Tax Crimes and the Self-Employed Taxpayer
Summary of an Employer's Duties Regarding Federal Taxes
Checklist of a Self-Employed Party's Duties Regarding Federal Taxes
AppendixDistinguishing between Employees and Self-Employed Independent Contractors227
Guides for Distinguishing between Independent Contractors and Employees
Form SS-8
Factors that Indicate a Worker is an Independent Contractor
Factors that Indicate a Worker is an Employee
About the Author262

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