Tax Deductions for Professionals

by Fishman, Stephen

• ISBN13: 9781413304046
• ISBN10: 1413304044
• Edition: 1st
• Format: Paperback
• Copyright: 2006-02-28
• Publisher: Ingram Pub Services

Summary

Understanding tax deductions is an essential part of any small business-without the money saved by taking deductions, many businesses couldn't even get started or operate profitably once they are up and running. With this book, professionals who own their own practice can rest assured that they will learn all they need to know about the many deductions that they are legally entitled to take. Organized into practical, easy-to-use categories of the most commonly-used business deductions - Also provides basic general information on how businesses are taxed and how tax deductions work - Many people (including professionals) quit a job to start their own business, which means that they have no previous experience with business deductions and they need to get up to speed quickly.

Table of Contents

Introduction
Why You Need This Book	2	(1)
The Ever-Changing Tax Laws	3	(1)
Icons Used in This Book	4
Tax Deduction Basics
How Tax Deductions Work	2	(3)
The Value of a Tax Deduction	5	(3)
What Professionals Can Deduct	8
Choice of Business Entity
Types of Business Entities	3	(7)
Limiting Your Liability	10	(7)
The Four Ways Business Entities Are Taxed	17	(6)
Comparing Tax Treatments	23	(24)
Should You Change Your Business Entity or Tax Treatment?	47
Operating Expenses
Requirements for Deducting Operating Expenses	2	(5)
Operating Expenses That Are Not Deductible	7	(1)
Tax Reporting	8
Meal and Entertainment Expenses
What Is Business Entertainment?	2	(1)
Who You Can Entertain	3	(1)
Deducting Entertainment Expenses	4	(5)
Calculating Your Deduction	9	(5)
Expenses Reimbursed by Clients	14	(1)
Reporting Entertainment Expenses to the IRS	15
Car and Local Travel Expenses
Deductible Local Transportation Expenses	3	(9)
The Standard Mileage Rate	12	(4)
The Actual Expense Method	16	(15)
How to Maximize Your Car Expense Deduction	31	(4)
Other Local Transportation Expenses	35	(1)
Reporting Transportation Expenses on Schedule C	36	(1)
When Clients Reimburse You	37	(1)
Professionals With Business Entities	38	(8)
Should You Trade In or Sell Your Old Car?	46
Long Distance Travel Expenses
What Is Business Travel?	3	(5)
What Travel Expenses Are Deductible	8	(3)
How Much You Can Deduct	11	(14)
Maximizing Your Business Travel Deductions	25	(3)
How to Deduct Travel Expenses	28	(2)
Travel Expenses Reimbursed by Clients	30
The Home Office Deduction
Qualifying for the Home Office Deduction	2	(15)
Calculating the Home Office Deduction	17	(14)
How to Deduct Home Office Expenses	31	(3)
Audit-Proofing Your Home Office Deduction	34
Deductions for Outside Offices
If You Rent Your Office	2	(6)
If You Own Your Office	8	(14)
If You Lease a Building to Your Practice	22
Deducting Long-Term Assets
Long-Term Assets	3	(4)
Section 179 Deductions	7	(12)
Depreciation	19	(26)
Tax Reporting and Record Keeping for Section 179 and Depreciation	45	(2)
Leasing Long-Term Assets	47
Start-Up Expenses
What Are Start-Up Expenses?	2	(1)
Starting a New Practice	3	(3)
Buying an Existing Practice	6	(1)
Expanding an Existing Practice	7	(1)
When Does a Professional Practice Begin?	8	(1)
How to Deduct Start-Up Expenses	9	(3)
Expenses for Practices That Never Begin	12	(2)
Organizational Expenses	14
Medical Expenses
The Personal Deduction for Medical Expenses	3	(1)
Self-Employed Health Insurance Deduction	4	(3)
Deducting Health Insurance as an Employee Fringe Benefit	7	(6)
Adopting a Medical Reimbursement Plan	13	(8)
Health Savings Accounts	21
Retirement Deductions
Why You Need a Retirement Plan (or Plans)	4	(4)
Types of Retirement Plans	8	(1)
Individual Retirement Accounts---IRAs	9	(4)
IRAs for Businesses	13	(4)
Qualified Retirement Plans	17	(2)
Keogh Plans	19	(2)
Solo 401(k) Plans	21	(1)
Roth 401(k) Plans	22
Inventory
What Is Inventory?	2	(3)
Do You Have to Carry an Inventory?	5	(1)
Deducting Inventory Costs	6	(5)
IRS Reporting	11
More Deductions
Advertising	4	(2)
Business Bad Debts	6	(7)
Casualty Losses	13	(4)
Charitable Contributions	17	(2)
Clothing	19	(1)
Disabled Access Tax Credit	20	(2)
License Fees, Dues, and Subscriptions	22	(1)
Education Expenses	22	(2)
Gifts	24	(1)
Insurance for Your Practice	25	(1)
Interest on Business Loans	26	(4)
Legal and Professional Services	30	(1)
Taxes	31	(4)
Domestic Production Activities	35
Hiring Employees and Independent Contractors
Employees Versus Independent Contractors	2	(2)
Tax Deductions for Employee Pay and Benefits	4	(8)
Reimbursing Employees	12	(2)
Employing Your Family	14	(9)
Tax Deductions When You Hire Independent Contractors	23
Professionals Who Incorporate
Automatic Employee Status	2	(2)
Paying Yourself	4	(12)
Employee Fringe Benefits	16	(8)
Shareholder Loans	24
How You Pay Business Expenses
Your Practice Pays	2	(2)
Using Personal Funds to Pay for Business Expenses	4	(9)
Your Client Reimburses You	13	(2)
Accountable Plans	15
Amending Tax Returns
Reasons for Amending Your Tax Return	2	(4)
Time Limits for Filing Amended Returns	6	(3)
How to Amend Your Return	9	(2)
How the IRS Processes Refund Claims	11
Staying Out of Trouble With the IRS
Anatomy of an Audit	2	(2)
The IRS: Clear and Present Danger or Phantom Menace?	4	(2)
How Tax Returns Are Selected for Audits	6	(3)
Tax Shelters, Scams, and Schemes	9	(4)
Ten Tips for Avoiding an Audit	13
Record Keeping and Accounting
Recording Your Expenses	2	(5)
Documenting Your Deductions	7	(18)
Accounting Methods	25	(6)
Tax Years	31
Help Beyond This Book
Secondary Sources of Tax Information	2	(6)
The Tax Law	8	(7)
Consulting a Tax Professional	15
Index	1