1. Small Business Taxes 101 for Sole Proprietorships

2. Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances. You are responsible for consulting with your own professional tax advisors concerning specific tax circumstances. The Knoxx Group disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns.

3. What We Will Cover Filing Taxes – Tax Forms – Importance of Keeping Good Records – Proper Documentation – DIY Software vs. Professional Categories – Income – Cost Of Sales – Expenses

4. Form 1040 – Income Tax Return One of the official documents that U.S. taxpayers can use to file their annual income tax return.

5. Schedule C – Profit or Loss from Business Report how much money you made or lost in your business.

6. Form 8829 – Expenses for Business Use of Home Calculates the expenses related to using your home for business.

7. Schedule SE – Self Employment Tax Calculates the self-employment tax you must pay. Required if you earn net profits of $400 or more. Some of the payments are tax deductible.

8. Good Records Good records are important for your business because they: – make filling in your tax returns easier and quicker – make it quicker for you or your accountant to do your taxes, which saves you time & money – provide information you need to manage your business and help it grow – Is required by law

9. Documentation Income Sale Receipts 1099-Misc Bank Statements Merchant Statements (i.e. paypal, square) Expenses Receipts Bank Statements Inventory Records

10. D.I.Y. vs. Professional DIY Software Price is cheaper Software can walk you thru the process http://www.irs.gov/Fil ing/E-File-Options http://www.irs.gov/Fil ing/E-File-OptionsProfessional Cost More Detailed understanding of tax laws to get you maximum benefit

11. Income & Cost of Sales Income Sales from product or services. Bartering for products or services. Cost of Sales If you make or buy goods to sell, you can deduct the cost. You must value your inventory at the beginning and end of each tax year.

12. Expenses Accounting/bookkeeping Advertising Bank service charges and fees Business gifts Business meals (50% is deductible) Computer, printer, and software Consultant fees Depreciation and amortization Dues for professional and trade associations Education expenses for maintaining or improving required skills Email, Internet access, and web hosting services Fax machine Insurance expense Legal and attorney fees License fees and taxes Merchant account or credit card processing fees Office furniture and equipment Office supplies Online services used for the business Parking and tolls Postage and shipping Printing and duplication Self-employment taxes Start-up expenses Telephone expense Travel expenses Vehicle A business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted. A necessary expense is one that is helpful and appropriate. http://www.irs.gov/Businesses/Small-Businesses-&-Self- Employed/Deducting-Business-Expenseshttp://www.irs.gov/Businesses/Small-Businesses-&-Self- Employed/Deducting-Business-Expenses

13. Home Business Expenses You can deduct business expenses for your home if: The part of the home used exclusively for business is your primary place of business You meet with clients, patients, or customers there for business purposes You use the space regularly for storage facility or day care center Based on Value of House and percentage of home used for business Mortgage Interest / Rent Real Estate Taxes Property Insurance Repairs & Maintenance Utilities

14. Resources IRS – Business Deduction Website http://www.irs.gov/Businesses/Small-Businesses-&-Self- Employed/Deducting-Business-Expenses IRS – E-filing Options http://www.irs.gov/Filing/E-File-Options

15. Contact Info R. Joyce Heard, CPA (615) 625-6211 contact@knoxxgroup.com www.knoxxgroup.com