1099 forms and Business Deductions You Can Claim When Filing Your Income Taxes

I've done some research about filing a 1099 form when I do my income taxes because I earn an online income. I work from home so I thought maybe I could deduct business expenses. Can I? Can you? It depends on several factors, but first of all, will you even receive a 1099 form for the work you've done from home? If you earned over $600.00 during 2011 you will receive a 1099 form from the company you worked for. You may have worked for more than one company but if you didn't earn that $600.00 from one of them you don't have to worry about it.

When I did my research I was looking for information about deducting business expenses when filing my income taxes. If you've made enough money online you can do this and it should result in a larger tax return. Filing the 1099 form itself is really not hard. If you're doing your own taxes online at a site like Turbo Tax or H&R Block a space is provided for you to enter the amount you earned. (see my hubs below to read about popular income tax return companies) For business expenses, it's gets more complicated. You will definitely have to use a long form. A 1040 EZ just isn't going to work, but first be sure you've spent enough (and made enough) to deduct business expenses. This is why I think I may use an income tax preparer rather than file online so I can actually get it done right. I want my questions answered in person, although Turbo Tax and other online income tax companies do have pretty good customer service.

The business expenses you can deduct if you work from home include deducting a percentage of your mortgage if you have an office in your home. You have to measure your office, then measure the square footage of your home. The area of your office is a percentage of the entire measurement of your home.

You can deduct a certain amount of your homeowners insurance, your phone bills if your phone, your land line phone and cell phone if used to conduct business from your home, and a percentage of how much you pay for internet usage and electricity. Don't forget the cost of your computer, office supplies if you bought any last year and fuel expenses used if you did any driving related to your business (try to keep track of your mileage).

You must have records of all you spent in 2011 to operate your business from home! Why? Because the proof is in the pudding. The tax preparer will want to see those bills and if he or she doesn't then it is still important to have them if you're audited. Hopefully you've kept them! When you pull them out of that drawer (or box) just highlight the business related phone calls you've made and do the same on your internet bills. It's always good to have a good record keeping system in place to prepare for income tax time.