Tax Deductions for Professionals

1. Tax Deduction Basics

• How Tax Deductions Work
• The Value of a Tax Deduction
• What Professionals Can Deduct

2. Choice of Business Entity

• Types of Business Entities
• Limiting Your Liability
• The Four Ways Business Entities Are Taxed
• Comparing Tax Treatments
• Should You Change Your Business Entity or Tax Treatment?

3. Operating Expenses

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

4. Meal and Entertainment Expenses

• What Is Business Entertainment?
• Who Can Be Entertained?
• Deducting Entertainment Expenses
• Calculating Your Deduction
• Expenses Reimbursed by Clients

5. Car and Local Travel Expenses

• Deductible Local Transportation Expenses
• The Standard Mileage Rate
• The Actual Expense Method
• Other Local Transportation Expenses
• Reporting Transportation Expenses on Schedule C
• When Clients Reimburse You
• Professionals With Business Entities

6. Long Distance Travel Expenses

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

7. The Home Office Deduction

• Qualifying for the Home Office Deduction
• Calculating the Home Office Deduction
• How to Deduct Home Office Expenses
• Audit-Proofing Your Home Office Deduction

8. Deductions for Outside Offices

• If You Rent Your Office
• If You Own Your Office
• If You Lease a Building to Your Practice

9. 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

10. Start-Up Expenses

• What Are Start-Up Expenses?
• Starting a New Practice
• Buying an Existing Practice
• Expanding an Existing Practice
• When Does a Professional Practice Begin?
• How to Deduct Start-Up Expenses
• Organizational Expenses

11. Medical Expenses

• The New Health Care Reform Bill
• The Personal Deduction for Medical Expenses
• Self-Employed Health Insurance Deduction
• Deducting Health Insurance as an Employee Fringe Benefit
• New Tax Credits for Employee Health Insurance
• Adopting a Medical Reimbursement Plan
• Health Savings Accounts

12. Retirement Deductions

• Why You Need a Retirement Plan (or Plans)
• Types of Retirement Plans
• Individual Retirement Accounts—IRAs
• IRAs for Businesses
• Qualified Retirement Plans
• Keogh Plans
• Solo 401(k) Plans
• Roth 401(k) Plans

13. Inventory

• What Is Inventory?
• Do You Have to Carry an Inventory?
• Deducting Inventory Costs
• IRS Reporting

14. More Deductions

• Advertising
• Business Bad Debts
• Casualty Losses
• Charitable Contributions
• Clothing
• Disabled Access Tax Credit
• License Fees, Dues, and Subscriptions
• Education Expenses
• Gifts
• Insurance for Your Practice
• Interest on Business Loans
• Legal and Professional Services
• Taxes
• Domestic Production Activities

15. Hiring Employees and Independent Contractors

• Employees Versus Independent Contractors
• Tax Deductions for Employee Pay and Benefits
• Reimbursing Employees
• Employing Your Family
• Tax Deductions When You Hire Independent Contractors

16. Professionals Who Incorporate

• Automatic Employee Status
• Paying Yourself
• Employee Fringe Benefits
• Shareholder Loans

17. How You Pay Business Expenses

• Your Practice Pays
• Using Personal Funds to Pay for Business Expenses
• Your Client Reimburses You
• Accountable Plans

18. Amending Tax Returns

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

19. Staying Out of Trouble With the IRS

• Anatomy of an Audit
• The IRS: Clear and Present Danger or Phantom Menace?
• How Tax Returns Are Selected for Audits
• Tax Shelters, Scams, and Schemes
• Ten Tips for Avoiding an Audit

20. Record Keeping and Accounting

• Recording Your Expenses
• Documenting Your Deductions
• Accounting Methods
• Tax Years

21. Help Beyond This Book

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

Index