Home business tax deductions : keep what you earn

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Where to find it

Law Library — 4th Floor Collection (4th floor)

Call Number
KF6491 .F574 2018
Status
In-Library Use Only

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Names:

Summary

Pay less to the IRS

For any home business, claiming all the tax deductions you are entitled to is essential to your business's financial success. Don't miss out on the many valuable deductions you can claim.

Here, you'll find out how to deduct:
start-up costs home office expenses vehicles and travel expenses entertainment and meals medical expenses under Obamacare, and retirement expenses.
You'll also learn how to keep accurate, thorough records in case the IRS ever comes calling. Easy to read and full of real-life examples, this book can help you take advantage of all the valuable deductions you are entitled to.

Includes the top home business deductions--the most valuable ones and how to claim them.

All the information in the book remains up-to-date for the 2017 tax year. The changes brought about by the Tax Cuts and Jobs Act all take effect in 2018, except for an increase in bonus depreciation which took effect September 27, 2017. Anyone who purchases the book has access to an update page on the Nolo website specific to this book which explains the 2017 bonus depreciation change and summarizes how the new tax law affects small business owners' taxes for 2018 and later. A new edition of the book, completely updated for the new tax law, will be published August 1, 2018.

Contents

  • Introduction p. 1
  • 1 Some Tax Basics p. 3
  • How Tax Deductions Work p. 4
  • How Businesses Are Taxed p. 7
  • What Businesses Can Deduct p. 11
  • Adding It All Up: The Value of Tax Deductions p. 13
  • 2 Is Your Home Business Really a Business? p. 19
  • Proving That You Are in Business p. 20
  • Tax Consequences of Engaging in a Hobby p. 29
  • Investing and Other Income-Producing Activities p. 30
  • 3 Getting Your Business Up and Running p. 39
  • What Are Start-Up Expenses? p. 40
  • When Does a Business Begin? p. 44
  • If Your Business Doesn't Last 15 Years p. 45
  • Expenses for Businesses That Never Begin p. 46
  • Avoiding the Start-Up Tax Rule's Bite p. 47
  • 4 Home Business Operating Expenses p. 49
  • Requirements for Deducting Operating Expenses p. 50
  • Operating Expenses That Are Not Deductible p. 56
  • How to Report Operating Expense Deductions p. 57
  • 5 Deducting Long-Term Assets p. 59
  • Long-Term Assets p. 61
  • Deducting Inexpensive Property p. 65
  • Section 179 Deductions p. 80
  • Bonus Depreciation p. 88
  • Regular Depreciation p. 91
  • Deducting Business Vehicles p. 99
  • Tax Reporting and Record Keeping p. 103
  • Leasing Long-Term Assets p. 105
  • 6 The Home Office Deduction p. 109
  • Qualifying for the Home Office Deduction p. 110
  • Corporation Employees p. 123
  • Calculating the Home Office Deduction p. 123
  • Simplified Home Office Deduction Method p. 142
  • IRS Reporting Requirements p. 145
  • Audit-Proofing Your Home Office Deduction p. 146
  • 7 Eating Out and Going Out: Deducting Meal and Entertainment Expenses p. 149
  • What Is Business Entertainment? p. 150
  • Whom You Can Entertain p. 152
  • Deducting Entertainment Expenses p. 152
  • Calculating Your Deduction p. 158
  • Reporting Entertainment Expenses on Your Tax Return p. 164
  • 8 Getting Around Town: Car and Local Travel Expenses p. 167
  • Deductible Local Transportation Expenses p. 168
  • The Standard Mileage Rate p. 171
  • The Actual Expense Method p. 174
  • Other Local Transportation Expenses p. 177
  • Reporting Transportation Expenses on Your Tax Return p. 177
  • When Clients or Customers Reimburse You p. 179
  • 9 Leaving Town: Business Travel p. 181
  • What Is Business Travel? p. 182
  • Deductible Travel Expenses p. 190
  • How Much You Can Deduct p. 192
  • Maximizing Your Business Travel Deductions p. 202
  • Travel Expenses Reimbursed by Clients or Customers p. 205
  • 10 Inventory p. 207
  • What Is Inventory? p. 208
  • Maintaining an Inventory p. 211
  • Deducting Inventory Costs p. 213
  • IRS Reporting p. 218
  • 11 Hiring Help: Employees and Independent Contractors p. 221
  • Employees Versus Independent Contractors p. 222
  • Tax Deductions for Employee Pay and Benefits p. 226
  • Employing Your Family or Yourself p. 233
  • Tax Deductions When You Hire Independent Contractors p. 242
  • 12 What If You Get Sick? Deducting Medical Expenses p. 247
  • The Affordable Care Act (Obamacare) p. 248
  • The Personal Deduction for Medical Expenses p. 258
  • Deducting Health Insurance Premiums p. 259
  • Tax Credits for Employee Health Insurance p. 267
  • Health Reimbursement Arrangements p. 268
  • Health Savings Accounts p. 275
  • 13 Deductions That Can Help You Retire p. 287
  • Why You Need a Retirement Plan (or Plans) p. 289
  • Individual Retirement Accounts (IRAs) p. 291
  • Employer IRAs p. 296
  • Keogh Plans p. 299
  • Solo 401(k) Plans p. 300
  • 14 More Home Business Deductions p. 303
  • Advertising p. 305
  • Business Bad Debts p. 307
  • Casualty Losses p. 313
  • Charitable Contributions p. 317
  • Dues and Subscriptions p. 317
  • Education Expenses p. 318
  • Gifts p. 321
  • Insurance for Your Business p. 322
  • Interest on Business Loans p. 323
  • Legal and Professional Services p. 327
  • Taxes and Licenses p. 328
  • 15 Record Keeping and Accounting p. 333
  • What Records Do You Need? p. 334
  • Records of Your Income and Expenses p. 349
  • Records Required for Specific Expenses p. 349
  • How Long to Keep Records p. 362
  • What If You Don't Have Proper Tax Records? p. 363
  • Accounting Methods p. 365
  • Tax Years p. 373
  • 16 Businesses Owned by Spouses p. 375
  • An Employer-Employee Arrangement p. 376
  • Establish a Qualified Joint Venture p. 380
  • Form a Business Entity p. 381
  • Do Nothing p. 382
  • 17 Eight Tips for Avoiding an IRS Audit p. 383
  • Tip #1: Be Neat, Thorough, and Exact p. 384
  • Tip #2: Don't File Early p. 384
  • Tip #3: Form a Business Entity p. 384
  • Tip #4: Explain Items the IRS Will Question p. 385
  • Tip #5: Avoid Ambiguous or General Expenses p. 385
  • Tip #6: Report All of Your Income p. 386
  • Tip #7: Watch Your Income-to-Deduction Ratio p. 386
  • Tip #8: Beware of Abnormally Large Deductions p. 387
  • Index p. 389

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