Tax Power for the Self-Employed addresses the specific and particular tax laws and regulations facing a self-employed individual. Unlike other small businesses, it focuses on the individual who either runs a single-person small business (or one with an otherwise limited number of employees) or the person who does something to make extra money that he or she may consider a hobby or side job, but from which the IRS expects tax to be paid.

Discussions of specific concern to the self-employed person include Schedule C deductions, with particular emphasis on changes in Sec. 179 deductions that target self-employed individuals for increased capital investments. Additional attention is placed on strategies for taking deductions to lower income subject to the self-employed tax, a totally separate tax from income tax. An entire chapter is devoted to the self-employment tax and Schedule SE.

With the latest IRS rules, regulations and decisions, as well as tax-planning strategies, any self-employed individual can feel confident that they are meeting all of their tax requirements while maximizing their tax savings.

Section 1: Making Money Chapter 1: Self-Employment Income Self-Employment Tax vs. FICA Income Taxable Income Sources Nontaxable Income Sources Chapter 2: Hobby Income and Loss 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 3: Phantom Income 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 2: Saving Money Chapter 4: Business Deductions for the Self-Employed Business Deductions Qualifying to Take Business Deductions Some Specific Business Deductions Business Deductions that are Subject to Special Limitations Common Business Deductions Chapter 5: In-Home Office Expense Deductions 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 6: Deductions for the Cost of Goods Sold Chapter 7: Non-Business Deductions Available to Self-Employed Taxpayers 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 8: Deductions from Adjusted Gross Income Itemized Deductions Schedule A Itemized Deductions Chapter 9: Exemptions Personal Exemptions Exemptions for Dependents The Phase-Out of Exemptions Chapter 10: Federal Income Taxes and Common Tax Credits 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 11: Retirement Planning for the Self-Employed Individual Retirement Arrangements Roth IRA Simplified Employee Pension Plans SIMPLE IRA Other Retirement Plans Tax-Deferred Retirement Options Available to the Self-Employed Section 3: Paying Money Chapter 12: Tax Law Compliance by the Self-Employed 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 Glossary Appendix: Distinguishing between Employees and Self-Employed Independent Contractors 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 Index About the Author

James O. Parker received his law degree from Memphis State University Humphreys School of Law. He received his LLM in taxation from Emory University School of Law. Mr. Parker currently practices in the areas of taxation, business law, probate and real estate. His private practice is located in Memphis, Tennessee.

 

Tax Power for the Self-Employed by James O. Parker
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