Table of Contents
The purpose of this publication is to provide general information about the federal tax laws that apply to small business owners who are sole proprietors and to statutory employees. This publication has information on business income, expenses, and tax credits that may help you file your income tax return.
|IF you need information about:||THEN you should see:|
|Fishermen (Capital Construction Fund)||
|Passive activities||Publication 925|
|S corporations||Instructions for Form 1120S|
(Note. The following is a list of questions you may need to answer so you can fill out your federal income tax return. Chapters are given to help you find the related discussion in this publication.)
|What must I know||Where to find the answer|
|What kinds of federal taxes do I have to pay? How do I pay them?||See chapter 1.|
|What forms must I file?||See chapter 1.|
|What must I do if I have employees?||See Employment Taxes in chapter 1.|
|Do I have to start my tax year in January, or can I start it in any other month?||See Accounting Periods in chapter 2.|
|What method can I use to account for my income and expenses?||See Accounting Methods in chapter 2.|
|What kinds of business income do I have to report on my tax return?||See chapter 5.|
|What kinds of business expenses can I deduct on my tax return?||See Business Expenses in chapter 8.|
|What kinds of expenses are not deductible as business expenses?||See Expenses You Cannot Deduct in chapter 8.|
|What happens if I have a business loss? Can I deduct it?||See chapter 9.|
|What must I do if I disposed of business property during the year?||See chapter 3.|
|What are my rights as a taxpayer?||See chapter 11.|
|Where do I go if I need help with federal tax matters?||See chapter 12.|
Internal Revenue Service
Business Forms and Publications Branch
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
www.irs.gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613
For the latest information about developments related to Publication 334, such as legislation enacted after it was published, go to www.irs.gov/pub334.
The following are some of the tax changes for 2012. For information on other changes, go to IRS.gov.
Tax rates. . For tax years beginning in 2012, the social security part of the self-employment tax remains at 10.4%. The Medicare part of the tax remains at 2.9%. As a result, the self-employment tax is 13.3%.
Maximum net earnings. The maximum net self-employment earnings subject to the social security part of the self-employment tax increases to $110,100 for 2012. There is no maximum limit on earnings subject to the Medicare part.
Standard mileage rate. For 2012, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 55.5 cents per mile. For more information, see Car and Truck Expenses in chapter 8.
The following are some of the tax changes for 2013. For information on other changes, go to IRS.gov.
Accounting methods. Certain small business taxpayers may be eligible to adopt or change to the cash method of accounting and may not be required to account for inventories. For more information, see Inventories in chapter 2.
Reportable transactions. You must file Form 8886, Reportable Transaction Disclosure Statement, to report certain transactions. You may have to pay a penalty if you are required to file Form 8886 but do not do so. You may also have to pay interest and penalties on any reportable transaction understatements. Reportable transactions include:
Transactions the same as or substantially similar to tax avoidance transactions identified by the IRS,
Transactions offered to you under conditions of confidentiality for which you paid an advisor a minimum fee,
Transactions for which you have, or a related party has, contractual protection against disallowance of the tax benefits,
Transactions that result in losses of at least $2 million in any single tax year ($50,000 if from certain foreign currency transactions) or $4 million in any combination of tax years, and
Transactions the same or substantially similar to one of the types of transactions the IRS has identified as a transaction of interest.
For more information, see the Instructions for Form 8886.
The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
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