Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I am trying to determine how/where a second income is reported for tax purposes and what expenses I can claim to off-set the income.

At the beginning of the year I established a sole proprietorship, home-based business (I provide computer consulting and training services). All of my business activities are conducted outside the home but I set-up a home office in 50% of my basement to help with client management, keep up my professional skills, etc. I employ my two children (both under 18)as part-time employees to help with filing, mailing, copying, checking email, etc. I pay each of my employees $2500 per year ($2000 goes into an IRA for each child).

For 6 weeks during the summer, I was employed as a "contract instructor" by a computer training center. No taxes or social security, etc. was deducted from my pay. Since September, I have been working as an instructor and my employer deducts taxes, social security, ect and will provide a W-2.

Now for the questions:

-Is the "contract instructor" income reported differently than the other "second W-2 income", and where?

-Can I claim my employee's salaries, auto expenses, etc. as a business expense, and where?

-Can I claim my home office as a deduction?

Many thanks!
SG
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.