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Yesterday, I mentioned that the economic stimulus bill included some measures designed to help small business in these times of economic turmoil. There are also some changes to the way business taxes will be figured for 2008. Here are some of the things to be aware of for your home business when figuring your 2008 taxes:

Self-employment tax

This one is actually a bit of a bummer. The amount of your income from your home business subject to Social Security tax used to be $97,500. Now it is $102,000 starting in tax year 2008.

Deferred compensation plans

It used to be that deferred income from compensation plans was made in the year of the deferral. Now, however, things have changed. Unfortunately, the rules are complex and difficult, and different situations are taken into account. You should probably check with the IRS or a tax professional to see what your situation requires.

Mileage rate

If you drive a lot for your home business, you can deduct some of your expenses. In 2008, the new mileage rate is 50.5 cents per mile for the first six months, and 58.5 cents per mile for the second half. This rather generous change was due to the spiking gas prices last summer. Look for the mileage rate to come down in 2009, I think.

Write-offs for business purchases

For 2008, the amount you can write off has increased. You can write off a total up to $800,000. Additionally, the new allowance (for tax year 2008 only) for property and/or business equipment is $250,000.

If your home business is organized as an S-corporation, you should also consult the IRS or a tax professional about the new income situation — which includes losses to the S-corp. when selling stocks or real estate in volatile 2008.

You can learn more about 2008 tax rules at IRS.gov, or buy contacting an accountant or other tax professional.

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