All too quickly we are approaching that dreaded time of year where the date April 15th becomes emblazoned on our minds like a blinking neon sign. The word "taxes" is enough to make many people hyperventilate and pull out their hair; however, you should know that it does not have to be so dramatic or scary.
For those whose adjusted gross income is under $52,000 a year, completing your taxes this year won't even cost you a thing. The IRS has teamed up with numerous well-known tax preparation services such as H&R Block and TurboTax to provide you with free tax-prep assistance and e-filing. Click on the FREE FILE link on the IRS website for a list of eligibility and requirements.
Even those who are self-employed are eligible to take advantage of this opportunity. Simply answer "yes" to any questions regarding self-employment and you'll be taken through the appropriate questions to determine what is and is not deductible. Especially for those working from home, take the time to sit down and consider what all you use day-to-day for your business—you may be able to write it or a portion of it off as a business expense.
Sellers, please note that you will not receive a 1099 form from eBay with records of your sales. This information you will have to keep track of yourself. Remember—it's much easier to spend some extra time keeping good books then spending time broke and behind bars.
Still trying to determine if you even need to file for your sales on eBay? Answer the nine questions below from the IRS.gov website to see if you qualify as self-employed:
"How do you distinguish between a business and a hobby?
Since hobby expenses are deductible only to the extent of hobby income, it is important to distinguish hobby expenses from expenses incurred in an activity engaged in for profit. In making this distinction, all facts and circumstances with respect to the activity are taken into account and no one factor alone is decisive. Among the factors which should normally be taken into account are the following:
1. Whether you carry on the activity in a businesslike manner
2. Whether the time and effort you put into the activity indicate you intend to make it profitable
3. Whether you depend on income from the activity for your livelihood
4. Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business)
5. Whether you change your methods of operation in an attempt to improve profitability
6. Whether you, or your advisers, have the knowledge needed to carry on the activity as a successful business
7. Whether you were successful in making a profit in similar activities in the past
8. Whether the activity makes a profit in some years, and how much profit it makes 9. Whether you can expect to make a future profit from the appreciation of the assets used in the activity "