I was married in April 06 so its my understanding that my wife and I would benefit most from filing our income taxes jointly. We both work full time jobs, but in addition to my full time job, I am also an independent contractor selling a little real estate here & there. (Only 2 sales in 2006 for a total of about $2800 in commission.) But being an independent contractor, I am allowed to write some things off that pertain to my business such as fees paid, marketing, cell phone, etc...
What do I claim my real estate income as & if it's not my primary job, am I still eligible for the write-offs?
Also, where can I find a list of general things that can be written off or deducted such as medical costs and whatnot? We want to make sure we get as much as we can back, but I'm concerned I could miss some things.
Any help is greatly appreciated, but anyone that actually walks me through it step by step will get best answer. I've never filed myself before so I'm a bit weary. Thanks!
2007-02-22 18:54:35 · 5 answers · asked by The Proof Is In The Pudding 3 in Business & Finance ➔ Taxes ➔ Other - Taxes
In almost all cases filing jointly saves taxes. You should check the computations for both joint and separate to see which is better.
Your real estate income is reported on schedule C,, form 1040. You can take all of the out of pocket and other expenses against that income even if it results in a loss. The general expenses you should have would be auto costs, advertising, multiple listing service, phone, entertainment, license costs, professional education etc.
If you go to IRS.gov and look under publications you would benefit by ordering two of them. The first is pub 17 your federal income tax and the second is the tax guide for small business. Both of these are good primers for what is taxable and what is deductible for both an individual and a small business.
Good Luck!
2007-02-22 22:57:43 · answer #1 · answered by waggy_33 6 · 3⤊ 0⤋
Get a copy if IRS Pub 17 from the IRS website. It will answer most of your questions and point you to additional resources for things that it does not address.
Yes, you will normally benefit from filing a joint return with your spouse.
You file Schedule C or C-EZ to claim the income and expenses from your real estate sales. Business expenses directly related to the production of income are fair game for deduction on Schedule C. Marketing, fees paid, phone calls, etc. are all fair game. If your cell phone is used for personal and business use, only the portion of the bill directly related to business can be deducted. With only 2 sales, that won't be much.
You file Schedule SE to calculate the Self Employment tax on the SE income. That's 15.3% of the net profit from the business activity.
Medical expenses to on Schedule A with other itemized deductions such as home mortgage interest and property taxes. Medical expenses are subject to a 7.5% AGI limitation.
2007-02-23 07:45:48 · answer #2 · answered by Bostonian In MO 7 · 4⤊ 0⤋
You can deduct legitimate business expenses from your real estate income on Schedule C of your 1040 return. This is obviously much too complicated a topic for Yahoo Answers, but is well worth your time to learn more.
2007-02-23 15:42:28 · answer #3 · answered by Big Larry 2 · 0⤊ 0⤋
waggy and bostonian have it......
www.irs.gov, business, publication 17 can be viewed on line...
good luck & bless
2007-02-23 12:13:48 · answer #4 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 0⤋
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2007-02-23 20:26:18 · answer #5 · answered by ellen h 2 · 0⤊ 0⤋