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Schedule A Itemized Deductions
Schedule C  Business Income and Expenses
schedule E Rental Income
FORM 8829: BUSINESS USE OF HOME 2006
RETIREMENT
GENERAL INFORMATION
 
 


 Business Expenses:

               Advertising
               Bad debts
               Mileage and auto expenses
               Travel expenses
               Commissions and fees
               Depreciation
               Interest
               Insurance
               Medical insurance (70% deductible 02), increasing to 100%
               Legal and professional services
               Repairs and maintenance
               Supplies
               Taxes and licenses
               Utilities
               Wages and benefits

Meal and Entertainment Expenses: (50% deductible)  KEEP YOUR RECORDS!!! I CANNOT STRESS ENOUGH

      Meals, entertainment, for clients or fellow workers when you discuss work  
      Gifts of $25 dollars or less, parties, etc
      Keep place, cost, and business purpose (keep everything)
      Petty cash can be used for small expenses usually $25 or less

 

KEEP YOUR RECORDS!!! I CANNOT STRESS ENOUGH

Computer and cellular phones are deductible business expenses
Travel expense can claim daily meals of $42 and incidentals and hotel room
Travel expense is $.55 per mile
               Keep date,  place,  and business purpose

List all property used in business for depreciation purposes…% of business use if less than 100%

A business can lose money for 2 of 5 years, but if losses occur after that appreciation of assets, or proof of attempt to make profit can be required by IRS, so records are essential

OFFICE IN THE HOME DEDUCTION

YOU CAN QUALIFY FOR OFFICE IN THE HOME IF YOU USE AN AREA OF YOUR HOME FOR AN OFFICE EXCLUSIVELY-FOR PAPER WORK, PHONE CALLS, PLANNING, ETC.  THIS ALLOWS YOU TO CLAIM MILEAGE FROM THE TIME YOU LEAVE HOME UNTIL YOU RETURN AS LONG AS THE MILEAGE IS BUSINESS RELATED (i.e. DEPOSITS, TO JOBS, VISITS TO CLIENTS, ETC)  KEEP RECORD OF DATE, PLACE VISITED, BUSINESS PURPOSE, AND MILEAGE

YOU CAN USE HOURS AND AREA USED FOR DAYCARE AS A DEDUCTION ALSO

Travel expense is $.55 per mile and you can use more that one vehicle as long as you use one at a time.  If you have an employee driving a vehicle and you drive one also, you cannot claim the mileage rate-you must claim actual expenses.  You can get around this by paying the employee to use his own vehicle, reimbursing at the rate of $.55 per mile.  Reimbursements are not taxable!!!

Also see SCH C information and FORM 2106 for additional specific information

©Steven E. Burns, 2003                              information from IRS Publications 


           
              

 
 
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