If you have a small business, do your own taxes! It’s not difficult and is a good learning experience. After all, you need to know what can be deducted, in order to make the best business decisions. Only bad thing about Small businesses, such as LLC’s, is that they have to pay 15% self-employment tax; that includes Medicare 2.9% and social security 12.4%. The SE Tax combined with Income Tax can really kill a businesses net income. But the good thing is, businesses can claim deductions and exemptions that’ll lower both SE and Income Tax. The major forms small businesses use, include Forms 4562, 8829, and 1040.

Form 4562, depreciation and amortization, is must do for all small businesses. Every business has something they can deduct on this form, whether it’s computer software or company furniture. Best of all, the deductions form this form will not only lower SE but Income tax too! On this form there is a section called election 179, which allows you to deduct the full expense for qualifying assets; you can check for qualifying assets on the 4562 publication. If your asset doesn’t qualify…