Deduct It!: Lower Your Small Business Taxes, 8th Edition

Cover......Page 1
Title Page......Page 4
Table of Contents......Page 8
Intro: Your Tax Deduction Companion......Page 14
1. Tax Deduction Basics......Page 18
How Tax Deductions Work......Page 19
How Businesses Are Taxed......Page 22
The Value of a Tax Deduction......Page 29
What Businesses Can Deduct......Page 33
Businesses That Lose Money......Page 37
2. Are You Really in Business?......Page 42
What Is a Business?......Page 44
Tax Consequences of Being a Hobbyist......Page 51
Income-Producing Activities......Page 53
3. Start-Up Expenses......Page 62
What Are Start-Up Expenses?......Page 63
Starting a New Business......Page 64
Buying an Existing Business......Page 67
Expanding an Existing Business......Page 68
When Does a Business Begin?......Page 69
Claiming the Deduction......Page 72
If Your Business Doesn’t Last 15 Years......Page 73
Expenses for Businesses That Never Begin......Page 74
Organizational Expenses......Page 76
Avoiding the Start-Up Tax Rule’s Bite......Page 77
4. Business Operating Expenses......Page 78
Requirements for Deducting Operating Expenses......Page 79
Operating Expenses That Are Not Deductible......Page 87
Tax Reporting......Page 89
5. Deducting Long-Term Assets......Page 90
What is a Long-Term Asset?......Page 92
Methods for Deducting Business Assets......Page 95
Rules for Deducting Any Long-Term Asset......Page 97
Section 179......Page 103
Bonus Depreciation......Page 114
Regular Depreciation......Page 119
Tax Reporting and Record Keeping......Page 134
Leasing Long-Term Assets......Page 136
6. Inventory......Page 140
What Is Inventory?......Page 141
Deducting Inventory Costs......Page 144
Maintaining an Inventory......Page 147
Determining the Value of Inventory......Page 149
7. Office Expenses......Page 154
Qualifying for the Home Office Deduction......Page 155
Corporation Employees......Page 168
Calculating the Home Office Deduction......Page 170
IRS Reporting Requirements......Page 184
Audit-Proofing Your Home Office Deduction......Page 186
Deducting an Outside Office or Workplace......Page 187
8. Car and Local Travel Expenses......Page 194
Deductible Local Transportation Expenses......Page 195
The Standard Mileage Rate......Page 206
The Actual Expense Method......Page 210
How to Maximize Your Car Expense Deduction......Page 226
When Clients or Customers Reimburse You......Page 228
Reporting Transportation Expenses on Schedule C......Page 229
Corporations, LLCs, and Partnerships......Page 231
9. Business Travel......Page 236
What Is Business Travel?......Page 237
What Travel Expenses Are Deductible......Page 245
How Much You Can Deduct......Page 247
Maximizing Your Business Travel Deductions......Page 260
How to Deduct Travel Expenses......Page 262
Travel Expenses Reimbursed by Clients or Customers......Page 265
10. Meal and Entertainment Expenses......Page 268
What Is Business Entertainment?......Page 269
Deducting Entertainment Expenses......Page 271
Calculating Your Deduction......Page 277
Reporting Entertainment Expenses on Your Tax Return......Page 283
11. Hiring Workers......Page 286
Employees Versus Independent Contractors......Page 287
Tax Deductions for Employee Pay and Benefits......Page 291
Reimbursing Employees for Business-Related Expenditures......Page 301
Employing Your Family or Yourself......Page 307
Tax Deductions When You Hire Independent  Contractors......Page 319
12. Retirement Deductions......Page 324
Why You Need a Retirement Plan (or Plans)......Page 326
Employer IRAs......Page 335
Keogh Plans......Page 337
Solo 401(k) Plans......Page 339
13. Medical Expenses......Page 342
The Health Care Reform Act......Page 343
The Personal Deduction for Medical Expenses......Page 346
Deducting Health Insurance Costs......Page 347
Tax Credits for Employee Health Insurance......Page 356
Adopting a Medical Reimbursement Plan......Page 360
Health Savings Accounts......Page 368
14. Additional Deductions......Page 380
Advertising......Page 382
Business Bad Debts......Page 385
Casualty Losses......Page 391
Charitable Contributions......Page 395
Clothing......Page 397
Education Expenses......Page 398
Gifts......Page 401
Insurance for Your Business......Page 402
Interest on Business Loans......Page 404
Legal and Professional Services......Page 409
Taxes and Licenses......Page 411
Domestic Production Activities......Page 415
15. Record Keeping and Accounting......Page 420
Basic Record Keeping for Tax Deductions......Page 421
Records Required for Specific Expenses......Page 435
How Long to Keep Records......Page 448
What If You Don’t Have Proper Tax Records?......Page 449
Accounting Methods......Page 451
16. Claiming Tax Deductions for Prior Years......Page 460
Reasons for Amending Your Tax Return......Page 461
Time Limits for Filing Amended Returns......Page 463
How to Amend Your Return......Page 466
How the IRS Processes Refund Claims......Page 468
17. Staying Out of Trouble With the IRS......Page 470
What Every Business Owner Needs to Know About the IRS......Page 471
Ten Tips for Avoiding an Audit......Page 478
18. Help Beyond This Book......Page 484
Secondary Sources of Tax Information......Page 485
The Tax Law......Page 492
Consulting a Tax Professional......Page 499
Index......Page 502
More Tax Resources at Nolo.com......Page 0
Keep Up to Date......Page 526
Online Legal Forms......Page 528
Lawyer Directory......Page 529