The IRS Economic Stimulus Package will give tax breaks to some small business owners. But, the tax breaks are only available if you own and operate your business solely out of your home. If you have some rental property in your name, but use it for business purposes, you might not qualify for this tax break. Also, if you have accountants or attorneys that work for you out of your home, you might not be eligible either.
For many, the benefits of the IRS Economic Stimulus Package may not be worth the tax savings. If you lose your job, you qualify for an unemployment tax reduction. If you lose your home, you can qualify for a reduction in your mortgage. The reduction in mortgage interest and principal is considered a tax relief. If you need to pay down mortgage debt quickly, this could be a big tax relief for you.
However, the IRS Economic Stimulus Package is not a tax relief for you if you do not use your home to conduct your business. It only affects those businesses which get their income from customers and vendors within the United States. Therefore, if your business earns income outside of the United States, this tax relief will not apply to you. If you do not own a home, your business can deduct travel expenses. To qualify, your business must have been operating for one year.
Even though the IRS has stated that they are offering tax relief to middle class and small businesses, there are many that cannot qualify for this relief. These include sole proprietorships, partnerships, LLCs, and corporations. To determine if you can qualify for this relief, you will need to contact a certified public accountant. He/she will be able to determine which tax code pages will apply to your situation. Although the IRS says this relief will apply to all taxpayers, it is important to remember that this is only an assumption and nothing has been finalized in regards to the tax codes.
If you own a home and conduct your business out of your home, then you can definitely take advantage of the tax relief offered through the Economic Stimulus Plan. The ESTD includes a tax credit of up to $7500 for your first year of tax filing, if you use your home as your business address. This tax credit can be used for mortgage interest, real estate taxes, utilities, personal taxes, and state and local taxes. Even if you do not use your home for business purposes, it can still be included in your calculations for tax relief. You can check with your tax preparer or accountant to determine if your home qualifies for this tax credit.
As a reminder, when it comes to tax relief, remember that there is no tax relief for debt, bankruptcy, or paying taxes over an extended period of time. Those are only two of the issues that are considered when it comes to filing taxes. Contact a certified public accountant or tax professional who can help you determine which tax relief programs you may qualify for. They will be able . . . . . . to provide you with all of the tax information that you need to determine which ESTD tax relief programs you may qualify for.