Tax Changes For Business Owners
Here are some of the tax changes for business owners that may affect you:
- You can claim 36.5 cents a mile as the standard mileage rate for 2002 for the cost of operating your car, van, pickup, or panel truck in your business. This rate decreases to 36 cents a mile for business miles you drive in 2003.
- If you are self-employed, you must pay the Social Security part of self-employment taxes for your maximum net self-employment earnings up to $84,900 for 2002. The ceiling will increase to $87,000 for 2003.
- If you provide child care facilities and services for your employees, you can receive a tax credit of 25% of the qualified expenses you paid for employee child care and 10% of qualified expenses you paid for child care resource and referral services. This credit is limited to $150,000 each year.
- If you are self-employed, you can deduct 70% of the amount you paid for medical insurance for yourself and your family. In 2003, the deduction increases to 100%.
You may obtain forms or publications by downloading them from this Web site or by calling toll free 1-800-TAX-FORM (1-800-829-3676).
This daily Tax Tip has been provided by the IRS
Note: These tips are provided to help trigger ideas on ways to minimize your tax burden, not as a substitute for professional advice. There is no "one-size-fits-all" answer - each taxpayer's situation is different. You should contact your tax preparer to determine together how this may affect your unique situation.