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How much are legal fees for a business?

How to deduct business fees from monthly Tax?

  • Let's say, I own my own small business as a Commercial Cleaner (or something similar) with only one Emplyee which is just Me... When it comes to deducting Tax out of my income per month. Let's say I made $600 this month. I purchased cleaning supplies which maybe cost 50.00 and have purshaved gas to commute maybe 2 times for the month whch would be 90.00 for the month. Is it reasonable for me to deduct those expense it cost me from the 600.00 I owe in Tax, and is legal? Thanks!

  • Answer:

    re read your question. If you [technically the company] MADE $600, you would not owe $600 in tax. - but no, you cannot deduct expenses from your TAX bill. {You need the company set up in the correct manner if you are going to be its employee. Normally, you are the owner, and the company does not pay income taxes.} The Schedule C (or a standard Profit and Loss statement) is set up to first show income, then subtract expenses, to arrive at net income. Then tax is paid on the net income {by the company, or in this case, by you as profit flows through to you in your small business model.}

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you keep track of your income($600/mo) and your expenses(supplies etc) that have a business purpose, you will report this one Sch C and unless you actually have someone else working with you you do not have employees, you cannot employ yourself if your 'net' amount, income less business expenses, is for example, $500/mo, your self employment tax will be about $61/mo for that tax alone commuting, driving from home to work it NOT deductible business to be able to claim them need to be maintained in contemporaneous log of those miles and no, the self employment taxes are not claimed as expenses to reduce your net income

If you are a sole proprietor you do not pay yourself a salary. You do a schedule C and subtract your expenses from your income and pay taxes on the difference. Commuting is not tax deductible.

re read your question. If you [technically the company] MADE $600, you would not owe $600 in tax. - but no, you cannot deduct expenses from your TAX bill. {You need the company set up in the correct manner if you are going to be its employee. Normally, you are the owner, and the company does not pay income taxes.} The Schedule C (or a standard Profit and Loss statement) is set up to first show income, then subtract expenses, to arrive at net income. Then tax is paid on the net income {by the company, or in this case, by you as profit flows through to you in your small business model.}

SumDude

If you are a sole proprietor you do not pay yourself a salary. You do a schedule C and subtract your expenses from your income and pay taxes on the difference. Commuting is not tax deductible.

Cathi K

you keep track of your income($600/mo) and your expenses(supplies etc) that have a business purpose, you will report this one Sch C and unless you actually have someone else working with you you do not have employees, you cannot employ yourself if your 'net' amount, income less business expenses, is for example, $500/mo, your self employment tax will be about $61/mo for that tax alone commuting, driving from home to work it NOT deductible business to be able to claim them need to be maintained in contemporaneous log of those miles and no, the self employment taxes are not claimed as expenses to reduce your net income

tro

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