Table of Contents

Introduction

Your Tax Deduction Companion

1. Tax Deduction Basics

How Tax Deductions Work
How Businesses Are Taxed
The Value of a Tax Deduction
What Businesses Can Deduct

2. Beating the Hobby Loss Rule

What Is a Business?
Tax Consequences of Being a Hobbyist
Income-Producing Activities

3. Start-Up Expenses

What Are Start-Up Expenses?
Starting a New Business
Buying an Existing Business
Expanding an Existing Business
When Does a Business Begin?
How to Deduct Start-Up Expenses
Expenses for Businesses That Never Begin
Organizational Expenses
Avoiding the Start-Up Tax Rule's Bite

4. Business Operating Expenses

Requirements for Deducting Operating Expenses
Operating Expenses That Are Not Deductible
Tax Reporting

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. Inventory

What Is Inventory?
Deducting Inventory Costs
Maintaining an Inventory
Determining the Value of Inventory

7. Office Expenses

Qualifying for the Home Office Deduction
Corporation Employees
Calculating the Home Office Deduction
IRS Reporting Requirements
Audit-Proofing Your Home Office Deduction
Deducting an Outside Office or Workplace

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
When Clients or Customers Reimburse You
Reporting Transportation Expenses on Schedule C
Corporations, LLCs, and Partnerships

9. Business Travel

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

10. 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

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. Retirement Deductions

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

13. Medical Expenses

The Personal Deduction for Medical Expenses
Deducting Health Insurance Premiums
Adopting a Medical Reimbursement Plan
Health Savings Accounts

14. Additional Deductions

Advertising
Business Bad Debts
Casualty Losses
Charitable Contributions
Clothing
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 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

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