Table of Contents
For the latest information about developments related to Pub. 334, such as legislation enacted after it was published, go to IRS.gov/pub334.
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:|
|Business expenses||Pub. 535|
|Fishermen (Capital Construction Fund)||
|Passive activities||Pub. 925|
|S corporations||Instructions for Form 1120S|
|Starting a business||Pub. 583|
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
(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.|
The following are some of the tax changes for 2016.
Maximum net earnings. The maximum net self-employment earnings subject to the social security part of the self-employment tax remains $118,500 for 2016. There is no maximum limit on earnings subject to the Medicare part.
Standard mileage rate. For 2016, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 54 cents a mile. For more information, see Car and Truck Expenses in chapter 8.
Sharing Economy Tax Center. . The sharing (or on-demand, gig, or access) economy refers to an emerging area of activity that involves people using technology advancements to arrange transactions that generate revenue from sharing assets or providing services upon request. Visit IRS.gov/sharing to get more information about the tax consequences of participating in the sharing economy.
Individual taxpayer identification number (ITIN) renewal. If you were assigned an ITIN before January 1, 2013, or if you have an ITIN that you haven't included on a tax return in the last three consecutive years, you may need to renew it. For more information, see the Instructions for Form W-7.
Real property used in a trade or business. Revenue Ruling 2016-15 clarifies that for purposes of the exclusion of qualified real property business indebtedness, real property used in a trade or business does not include real property developed and held primarily for sale to customers in the ordinary course of business. See Revenue Ruling 2016-15, 2016-26 I.R.B. 1060, available at IRS.gov/irb/2016-26_IRB/ar08.html.
The following are some of the tax changes for 2017. 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.
Small Business and Self-Employed (SB/SE) Tax Center. Do you need help with a tax issue or preparing your return, or do you need a free publication or form? SB/SE serves taxpayers who file Form 1040, Schedules C, E, F, or Form 2106, as well as small business taxpayers with assets under $10 million. For additional information, visit the Small Business and Self-Employed Tax Center at IRS.gov/businesses/small.
The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children ® (NCMEC). 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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