Table of Contents

Introduction

Your Legal Companion for Home Business Tax Deductions

1. Home Business Tax Deduction Basics

How Tax Deductions Work
How Businesses Are Taxed
What Businesses Can Deduct
Adding It All Up: The Value of Tax Deductions

2. Are You Really In Business?

Proving That You Are in Business
Tax Consequences of Engaging in a Hobby
Investing and Other Income-Producing Activities

3. Avoiding the Start-Up Tax Trap

What Are Start-Up Expenses?
When Does a Business Begin?
How to Deduct Start-Up Expenses
Expenses for Businesses That Never Begin
Avoiding the Start-Up Tax Rule's Bite

4. Home Business Operating Expenses

Requirements for Deducting Operating Expenses
Operating Expenses That Are Not Deductible
How to Report Operating Expense Deductions

5. Deducting Long-Term Assets

Long-Term Assets
Section 179 Deductions
Depreciation
Tax Reporting and Record Keeping for Section 179 and Depreciation
Leasing Long-Term Assets

6. The Home Office Deduction

Qualifying for the Home Office Deduction
Corporation Employees
Calculating the Home Office Deduction
IRS Reporting Requirements
Audit-Proofing Your Home Office Deduction

7. Meal and Entertainment Expenses

What Is Business Entertainment?
Who You Can Entertain
Deducting Entertainment Expenses
Calculating Your Deduction
Reporting Entertainment Expenses on Your Tax Return

8. Car and Local Travel Expenses

Deductible Local Transportation Expenses
The Standard Mileage Rate
The Actual Expense Method
How to Maximize Your Car Expense Deduction
Other Local Transportation Expenses
Reporting Transportation Expenses on Your Tax Return
When Clients or Customers Reimburse You

9. Business Travel

What Is Business Travel?
Deductible Travel Expenses
How Much You Can Deduct
Maximizing Your Business Travel Deductions
Travel Expenses Reimbursed by Clients or Customers

10. Inventory

What Is Inventory?
Maintaining an Inventory
Deducting Inventory Costs
IRS Reporting

11. Hiring Workers

Employees Versus Independent Contractors
Tax Deductions for Employee Pay and Benefits
Reimbursing Employees for Business-Related Expenditures
Employing Your Family or Yourself
Tax Deductions When You Hire Independent Contractors

12. Medical Expenses

The Personal Deduction for Medical Expenses
Deducting Health Insurance Premiums
Medical Reimbursement Plans
Health Savings Accounts

13. Retirement Deductions

Why You Need a Retirement Plan (or Plans)
Individual Retirement Accounts (IRAs)
Employer IRAs
Keogh Plans
Solo 401(k) Plans

14. Additional Home Business Deductions

Advertising
Business Bad Debts
Casualty Losses
Charitable Contributions
Dues and Subscriptions
Education Expenses
Gifts
Insurance for Your Business
Interest on Business Loans
Legal and Professional Services
Taxes and Licenses
Domestic Production Activities

15. Record Keeping and Accounting

Basic Record Keeping for Tax Deductions
Records Required for Specific Expenses
How Long to Keep Records
What If You Don't Have Proper Tax Records?
Accounting Methods
Tax Years

16. Claiming Tax Deductions for Prior Years

Reasons for Amending Your Tax Return
Time Limits for Filing Amended Returns
How to Amend Your Return
How the IRS Processes Refund Claims

17. Staying Out of Trouble With the IRS

What Every Home Business Owner Needs to Know About the IRS
Ten Tips for Avoiding an Audit

18. Help Beyond This Book

Secondary Sources of Tax Information
The Tax Law
Consulting a Tax Professional

Index

Back to Top