Legal Question in Business Law in California

Re: Filing taxes

Aaron:

Thanks for your inquiry and posting. As a sole proprietor, your taxes "flow through" to your personal income, so you would list income from the business on your 1040 tax return, and add both income and expenses to the one-page schedule C that is part of the tax return.

The deductions question is a much bigger one, and one you should consult a tax advisor on. In general, any business related expenses are tax deductible, such as advertising, charge offs of bad debts, business taxes, fees, licenses, dues or memberships, fuel costs, home office expenses, insurance, interest, leasing costs, depreciation of an asset, legal, accounting, or other professional fees, maintenance and repairs, meals and entertainment, motor vehicle expenses, office expenses, health care costs, salaries or wages, supplies, telephone or utility costs, and business travel or education expenses.

I hope this helps you, and best of luck on your new business.

Re: Filing taxes

If you incorporate you may select a fiscal year end and have a short or long first year depending on your income. Next, save all business related income and expense receipts. . . get an accountant or at least a bookeeper.