Home Business Tax Deductions

1. Some Tax 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. Start-Up Expenses

• 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 New Health Care Reform Bill
• The Personal Deduction for Medical Expenses
• Deducting Health Insurance Premiums
• New Tax Credits for Employee Health Insurance
• 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