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Tuesday, February 17, 2015

Tax Time Again - Owning a Business Rocks


It is time to do income taxes again and I am deep in the usual Canada-US issues as well as the new situation of being an independent contractor (consultant) and a small business owner (blessed by Fox News as the backbone of the nation).

Luckily, I got a discount on my Turbotax by accident.  I received a free copy of Turbotax Premier from Vanguard based on my account status, but they wanted $80 for Home and Business version.  At a certain point in preparing my taxes the Turbotax program said I needed to upgrade to Home and Business for $10 so I accepted and saved $70.  I also had to buy a JK Lasser guide that is about 4 inches thick to understand my new situation, it looks like a phone book due to the complicated US system.

It turns out that being a small business owner or contractor, you get to deduct the costs of doing business - a share of your cellphone, internet, supplies, laptop as well as the costs of setting up the business like legal fees, website fees.  Even with a conservative estimate of my expenses, it saved me a bunch on my taxes.

In any case, unlike most Americans, I have no problem with how much tax I pay to Uncle Sam.  I paid Canadian Income Tax for years in the mid-90's and I know what high taxes look like.  The USA is a low tax paradise compared to Canada and the rest of the world.

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