Any tax pros on?

[MichelleCarmen]

Okay, posting this will show how completely incompetent I am when it comes to taxes! lol

I''m looking for an explaination regarding itemized deductions when a person is an independant contractor (this question applies to 2009, not 200.

There is no state income tax here where I live, so I''m just working with Federal.

Say as an hypothetical amount, I earn $5,000 in one year and owe $750 in Fed. Income Tax.
Then I take a .50 per milage deduction for the year - say 2,000 miles that year, which is $1,000.

Does that just mean I simply do not owe the IRS something OR that the IRS will owe me $250?

Also, what about work-related expenses, such as a $1,000 laptop and a $200 a year clothing budget?

LOL - I feel like such an idiot posting this, but my DH doesn''t know and the IRS site doesn''t make any sense. Maybe I should open my Accounting 201 book? It''s covered in dust and will make me sneeze.

 

[Kismet]

The deduction is against your income, so instead of being taxed on $5,000 you''d be taxed on $4,000.

I imagine you''d have to depreciate (deduct a % of the purchase price) the laptop assuming it''s solely for business use. Clothing I''m not sure on, but probably not unless it''s a uniform or similar. Try reading this publication.

 

[MichelleCarmen]

So, if my milage deduction comes out to $6,000, I simply do not owe anything for Fed. Taxes? How do I get the IRS to pay me???

Thanks. . .I'll check out the website.

Oh, and as far as the clothing, I was going to deduct items that could be claimed. . .say, I'd say I need good walking shoes, possibly? lol I won't try and write off designer jeans (even though that thought HAS crossed my mind!)

I'm going to try deducting depreciation on my car, too, and will hire a CPA when the time comes. . .I'm just trying to prepare ahead of time because I'll have a ton of expenses and they will exceed how much I will owe the IRS in Fed. Taxes.