Index
- Accrual method, 19
- Accuracy of e-filing, 31
- Active mentors, 168
- Active participation, 28
- Actual expense method for home office deduction:
- Actual receipt, 18
- Actual vehicle expenses, 51, 52
- ADA (Americans with Disabilities Act), 176
- ADEA (Age Discrimination in Employment Act), 176
- Administrative activities, substantial, 70–71
- Advances, 37–38
- Advertising costs:
- Affordable Care Act, 110
- Affordable care exchanges, 110
- Age Discrimination in Employment Act (ADEA), 176
- All-events test, 19
- Alternative payments:
- Aquarium and its maintenance, 87
- Archer Medical Savings Accounts (MSAs), 111
- Attorney's fee, 68
- Audit-proofing your return:
- deductions relative to income, 164
- eligibility, ensuring, 78
- filing on time, 163
- home office deduction, 78–79, 162
- income, misreporting, 164
- income, reporting business, 163
- limitations, observing, 163
- photographing home office space, 78
- recordkeeping, 163
- required information, supplying, 163
- workers, classifying correctly, 163
- Audit rates, 5
- Bank account, business, 12, 16
- Banking fees, 92
- Bankruptcy, 6
- Bartering, 38
- Bonus depreciation, 82
- Books, 87
- BOP (business owner's policy), 86
- Broker's fee, 68
- Budget, 5
- Bullying, 177
- Business bad debts, 92
- Business bank account, 12, 16
- Business code, 28
- Business credit card, 12
- Business Development Program, 168
- Business driving, 50–51, 62
- Businesses, multiple, 30
- Business finances, separating from personal finances, 12
- Business gifts, 61
- Business interruption coverage, 7
- Business meals. See also Travel expenses
- Business name:
- Business owner's policy (BOP), 6, 86
- Business participation, 28
- Business physical disaster loans, 93
- Business property, gain on sale of, 19
- Business reasons for recordkeeping, 14
- Business-related tax credit:
- disabled access credit, 129
- employer credit for FICA on tips, 129–130
- employer differential wage payment credit, 129, 130
- employment-related credits, 129–130
- empowerment zone employment credit, 129, 130
- IRS forms for, 130
- research credit, 128–129
- small employer health-care credit, 130
- small employer pension plan startup costs credit, 130
- work opportunity credit, 129, 130
- Business structure:
- Business travel. See also Travel expenses
- Buying leased vehicle, 55
- Buying versus leasing:
- Buyout, 174
- Calendar year, 17
- Cancellation of debt (COD) income, 39
- Cancellations, in commercial leases, 67–68
- Capital, access to, 179
- Carrybacks, net operating loss, 44, 162
- Carryovers:
- Cash intensive businesses, 36
- Cash method:
- Cash payments of $10,000 or more, 36
- Casualty and theft losses, 92–93
- C corporation, 179
- Charitable contributions, 93–95
- Check, paying estimated taxes by, 150
- Cleaning and janitorial services, 87
- Cloud solutions, 13, 85
- COBRA (Consolidated Omnibus Budget Reconciliation Act), 109–110, 176
- Code, business, 28
- COD (cancellation of debt) income, 39
- COGS (cost of goods sold), 39
- Cohan Rule, 61
- COLAs (cost-of-living adjustments), 158
- Collections on outstanding receivables, improving, 43
- Commercial leases:
- Commuting, 51
- Computer-related costs:
- Confidential information, 22
- Consolidated Omnibus Budget Reconciliation Act (COBRA), 176
- Constructive receipt, 18
- Consulting agreement, 180–181
- Contributions to retirement savings, 116
- Conventions, 83
- Converting personal items to business use:
- Copyrights, 22
- Corp., on business cards, 21–22
- Correspondence audit, 164
- Cost of goods sold (COGS), 39
- Cost-of-living adjustments (COLAs), 158
- Co-tenancy clause, 174
- Credit card, business, 12
- Credit card payments for estimated taxes, 149
- Credit policies, 43
- Credits. See Tax credits
- Customer lists, 22
- Deadline, filing, 31
- Debit card payments for estimated taxes, 149
- Debt cancellation, 39
- Decorator fees, 87
- Deductions:
- accelerating, 159–160
- advertising costs, 90–91
- bad debts, 91–92
- banking fees, 92
- casualty and theft losses, 92–93
- charitable contributions, 93–95
- dues, 95–96
- education expenses, 96
- health coverage, 113–114
- impairment-related expenses, 96–97
- income compared to, 164
- interest, 97–98
- legal and professional fees, 98–99
- licenses and regulatory fees, 99
- materials and supplies, 79–80, 99, 102, 158
- moving expenses, 99–100
- necessary expenses, 90
- nondeductible expenses, checklist of, 104
- ordinary expenses, 89
- outsourced workers, payments for, 100–101
- penalties, fines, and damages, 101–102
- repayment of income, 102
- startup costs, 102–103
- subscriptions, 103, 159
- tax credits versus, 127
- taxes, 103
- utilities, 104
- Designations after business name, 21
- Direct expenses, for home office deduction, 72
- Directly related test, for entertainment, 57–58
- Disabled access credit, 129
- Disaster loans, 93
- Disaster loss on prior year's return, 156–157
- Distance test, for moving expenses, 99, 100
- Distributions from retirement savings, 122–123
- Doing business as (DBA):
- Early termination clause, 174
- Earned income, additional Medicare tax on, 146–147
- Earned income tax credit (EITC), 133–134
- EBSA (Employee Benefits Security Administration), 120
- Economic injury disaster loans (EIDLs), 93
- Economic loss, 43–44
- Economic-performance test, 20
- Education expenses, 96
- E-filing, 32
- EFTPS (electronic federal tax payment system), 149
- EIDLs (economic injury disaster loans), 93
- EIN (employer identification number):
- EITC (earned income tax credit), 133–134
- EITC Assistant, 134
- Electronic federal tax payment system (EFTPS), 149
- Electronic payment of estimated taxes, 149
- Employee Benefits Security Administration (EBSA), 120
- Employees:
- bullying, 177
- classifying correctly, 163
- employer responsibilities, 175
- federal employer identification number, 14
- insurance obligations, 176
- legal considerations, 176–177
- payroll, outsourcing, 176
- practical considerations, 177–178
- self-employment practical issues, 7
- tax responsibilities, 175–176
- theft by, 177
- workplace violence, 177
- Employer credit for FICA on tips, 129–130
- Employer differential wage payment credit, 129, 130
- Employer identification number (EIN):
- Employer responsibilities toward employees:
- Employment-related credits:
- Errors and omissions policy, 7
- Escape clauses, lease:
- Estimated taxes:
- Exchange, 38
- Exclusive use clause, in lease, 174
- Exclusive use test, for home office deduction, 71–72
- Exit strategy, 179
- Expenses. See also specific expenses
- Extension, filing, 31
- Fair market value, 84
- Family and Medical Leave Act (FMLA), 176
- Farmers, self-employed, 4
- Federal employer identification number (EIN):
- FICA on tips, employer credit for, 129–130
- Fictitious name:
- Filing deadline, 31
- Filing extension, 31
- Filing location, 32
- Filing on time, 164
- Financial planner, working with, 123
- Financial statements, generating, 14
- Fines, 101–102
- First-year expensing, 80
- Fiscal year, 17
- Flexible spending account (FSA), 109
- Flowers and plants, 87
- FMLA (Family and Medical Leave Act), 176
- Form 1040, 25
- Form 1040-ES, 149
- Form 1045, Application for Tentative Refund, 44
- Form 1099-INT, Interest Income, 42
- Form 1099-K, Payment Card and Third-Party Network Transactions, 9, 42
- Form 1099-MISC, Miscellaneous Income:
- Form 1099-NEC, Nonemployee Compensation, 9, 16, 28, 39, 42, 100
- Form 2441, Dependent Care Expenses, 132
- Form 3800, General Business Credit, 29
- Form 4563, Depreciation and Amortization, 29
- Form 4684, Casualties and Thefts, 30
- Form 4797, Sales of Business Property, 30
- Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, 31, 164
- Form 5305-SEP, Simplified Employee Pension–Individual Retirement Accounts Contribution Agreement, 117
- Form 5500-EZ, Annual Return of One Participant (Owners and Their Spouses), 120
- Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, 120
- Form 6765, Credit for Increasing Research Activities, 129
- Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, 36
- Form 8824, Like-Kind Exchanges, 30
- Form 8826, Disabled Access Credit, 129
- Form 8829, Business Use of a Home, 73
- Form 8829, Expenses for Business Use of Your Home, 30
- Form 8850, Pre-Screening Notification and Certification Request for the Work Opportunity Credit, 129
- Form 8863, Employment Credits, 133
- Form 8899, Notice of Income from Donated Intellectual Property, 94
- Form 8994, Employer Credit for Paid Family and Medical Leave, 130
- Form 8995, Qualified Business Income Deduction Simplified Computation, 138
- Form 8995-A, Qualified Business Income Deduction, 139
- Form SS-4, Application for Employer Identification Number, 16
- Form W-4, Wage Withholding Allowances, 151
- Form W-9, Request for Taxpayer Identification Number and Certification, 9
- Fringe benefits, 179
- FSA (flexible spending account), 109
- Furniture and fixtures:
- HDHP (high-deductible health plan), 111
- Health insurance:
- Health savings accounts (HSAs):
- Heavy SUVs, 52
- High-deductible health plan (HDHP), 111
- Hobby losses, 45
- Home office. See also Home office deduction
- Home office deduction, 69–79. See also Home office
- actual expense method, 72–73
- ancillary results, 79
- audit concerns, 78–79, 163
- carryover, 78, 79, 162
- deduction, figuring, 72–76
- depreciation, 72–73, 75–76, 79
- described, 70
- direct expenses, 72
- eligibility, 70–72, 79
- exclusive use test, 71–72
- indirect expenses, 72
- limitation, 76–77
- Home office deduction (Continued)
- photographing office space, 78
- purpose of space, 70–71
- regular use, 72
- simplified method, 75–76
- space, allocating, 73, 75
- strategies, 76–77
- use of space, 71–72
- Homeowner's/renter's policy, 86
- HSAs (health savings accounts):
- HUBZone Program, 168
- Identity theft protection, 16
- Impairment-related expenses, 96–97
- Improvements, in commercial leases, 67
- Inc., on business cards, 20–21
- Incidental costs of business travel, 58
- Income:
- accrual method, 19–20
- alternative payments, 38–39
- cash intensive businesses, 36
- cash method, 17–18
- cash payments of $10,000 or more, 36
- debt cancellation, 39
- defined, 8
- disputed amounts, 41
- Form 1099-INT, 42
- Form 1099-K, 42
- Form 1099-MISC, 42
- loans, 38
- losses, 43–47
- misreporting, 164
- nonpayment, 43
- other business income, 40
- payments in kind, 38
- payment types, 36–37
- percentage-of-completion method, 20
- postponing, 158–159
- repayment of, 99
- reporting, 39–40
- retainers, advances, and prepayments, 37–38
- selling items in addition to services, 39–40
- tax rules concerning, 35
- Independent contractors:
- Indirect expenses, for home office deduction, 72
- Individual mandate for medical insurance, 110
- Installment method, 20
- Insurance. See also Medical insurance
- Intellectual property (IP):
- Interest, 97–98
- Internal Revenue Service (IRS):
- IP (intellectual property):
- IRS (Internal Revenue Service):
- Landlord, negotiating with, 174
- Leases, commercial:
- Leases, vehicle:
- Legal and professional fees, 98–99
- Legal considerations. See also Business structure; specific topics
- Legal status. See Business structure
- Liability protection and other risks:
- Licenses, 23
- Lifetime learning credit, 133
- Limited liability company (LLC), 4, 21, 178
- Living expenses, 4–5
- LLC (limited liability company), 4, 21, 178
- Loans:
- MAGI (modified adjusted gross income) limits:
- Maintenance and repairs, IT, 85–86
- Malpractice insurance, 7
- Marketplaces, health insurance, 110
- Material participation, 30
- Materials and supplies, 79–80
- Meals, during business travel, 59
- Medical insurance:
- Meeting place, home office as, 71
- Member of limited liability company, 4
- Mentor, types of mentors, 168
- Merchant authorization costs, 92
- Mid-quarter convention, 83
- Midyear convention, 82
- Mileage rate:
- vehicle expenses, 50
- Miscellaneous office-related costs:
- Modified adjusted gross income (MAGI) limits:
- Moving expenses, 99–100
- Moving to larger quarters:
- NAICS (North American Industry Classification System) codes, 28
- Negotiating with landlord, 174
- Net earnings from self-employment, 9
- Net investment income (NII) tax, 147–148
- Net operating loss (NOL):
- Occupational Safety and Health Administration (OSHA), 176, 177
- Office-related costs:
- aquarium and its maintenance, 87
- books, 87
- cleaning and janitorial services, 87
- computer-related costs, 84–86
- decorator fees, 87
- flowers and plants, 87
- furniture and fixtures, 80–84
- home office deduction, 68–79
- insurance, 86
- materials and supplies, 79–80
- miscellaneous, 87–88
- postage and shipping, 88
- rental expenses, 65–66
- security system costs, 88
- uniforms, 88
- utilities, 86–87
- Partnerships, spousal, 30
- Passive mentors, 168
- Passive participation, 28
- Patents, 21
- Payables, paying outstanding, 159
- Payment methods for estimated taxes:
- Payments in kind, 38
- Payment types:
- Pension plans, 121
- Pension plan startup costs credit for small employers, 130
- Percentage-of-completion method, 20
- Per-diem rates for meals, 58
- Permission to use intellectual property, 23
- Permits, 23
- Personal credits arising from business:
- Personal finances, separating from business finances, 12
- Personal items, converting to business use:
- Personal liability, 6
- Personal mandate for medical insurance, 108
- Photographing office space, 78
- Piracy, software, 23
- Postage and shipping, 88
- Post-year tax elections:
- Prepaid interest, 19
- Prepayments:
- Principal place of business, 70
- Prizes and contests, 91
- Processes, 22
- Profitability, tracking, 14
- Profit motive, proving, 45–46
- Proof of acceptance, 31
- Publication 538, Accounting Periods and Methods, 17
- Publication 596, Earned Income Credit, 134
- Publication 1976, Do I Qualify for Relief under Section 530?, 101
- Qualified business income (QBI) deduction, 137
- Qualified retirement plan. See also Retirement savings
- QuickBooks, 13
- Recordkeeping:
- apps for, 13–14
- audit-proofing your return, 163–164
- business gifts, 14, 61
- business meals and entertainment, 56–57
- business reasons for, 14
- business travel, 59
- financial statements, generating, 14
- log, sample business mileage and expense, 54
- profitability, tracking, 14
- receipts, retaining, 13
- sampling method, 55
- software versus cloud solutions, 12–13
- transportation expenses, 60
- vehicle expenses, 50–51, 52
- Refund speed, as e-filing benefit, 31
- Registering fictitious name, 21
- Regular depreciation of furniture and fixtures, 82–83
- Regular use, of home office, 72
- Regulatory fees, 99
- Renewals, in commercial leases, 67
- Rent, 66, 159
- Rental expenses:
- Safe harbors, estimated tax, 150
- Sales taxes, 152–153
- Sampling for vehicle expenses recordkeeping, 53
- SBA (Small Business Administration):
- Scanning receipts, 13
- Schedule A, 93, 97, 99
- Schedule C, Profit or Loss from Business:
- accounting method, 28
- basic information, 28
- business code, 28
- business participation, 28
- e-filing, 31
- filing deadline, 30
- filing extension, 30
- filing location, 30
- Form 1099-MISC reporting requirements, 28
- income, reporting, 39–40, 41
- multiple businesses, 29
- name and address, 27
- parts, 29
- sample form, 26–27
- spousal partnerships, 29
- startup, 28
- tax identification number, 28
- Schedule F, 4
- Schedule H, Household Employment Taxes, 131
- Schedule SE, Self-Employment Tax, 144, 145–146
- S corporation, 179
- SEAP (Self-Employment Assistance Program), 8
- Section 179 deduction, 80–81
- Section 530 relief, 101
- Security deposits, 19, 66
- Security of e-filing, 31
- Security system costs, 88
- Self-employment. See also specific topics
- Self-Employment Assistance Program (SEAP), 8
- Self-employment tax, 143–146
- Selling items in addition to services, 39–40
- Selling the business, 180–181
- SEP (simplified employee pension):
- Simplified method for home office deduction, 75–76
- Small Business Administration (SBA):
- Small employer health-care credit, 130
- Small employer pension plan startup costs credit, 130
- Social media, 91
- Social Security credits, 144–146
- Social Security number (SSN), 14
- Software:
- Spousal partnerships, 29
- SSN (Social Security number), 14
- Staff:
- bullying, 177
- classifying correctly, 163
- employer responsibilities, 175
- federal employer identification number, 14
- insurance obligations, 176
- legal considerations, 176–177
- payroll, outsourcing, 178
- practical considerations, 177–178
- self-employment practical issues, 7
- tax responsibilities, 175–176
- theft by, 177
- workplace violence, 177
- Tax bonus
- Tax credits:
- American Opportunity credit, 132–133
- business-related tax credit, 127–130
- deductions versus, 96, 127
- dependent care credit, 131–132
- disabled access credit, 129
- earned income tax credit, 133–134
- employer credit for FICA on tips, 129–129
- employer differential wage payment
- credit, 129, 130
- employment-related credits, 129–130
- empowerment zone employment credit, 129, 130
- general business credit, 128
- IRS forms for, 130
- lifetime learning credit, 133
- personal credits arising from business, 130–134
- research credit, 128–129
- small employer health-care credit, 130
- small employer pension plan startup costs credit, 130
- work opportunity credit, 129, 130
- Tax deductions. See Deductions; specific deductions
- Tax developments, staying current on, 157
- Taxes:
- Tax gap, 35
- Tax identification number (TIN), 14–16, 28
- Tax loss, 44
- Tax payments, saving for, 143
- Tax savings strategies:
- Technology in place of travel, 62
- Term, lease, 67
- Terminology, tax, 8–9
- Theft, employee, 177
- Third Party Reporting Information Center, 42
- Time test, for moving expenses, 99, 100
- TIN (tax identification number), 14–16, 28
- Trademarks, 21, 22
- Trade secrets, 22
- Trading in old car for new one, 55–56
- Transferring vehicle lease, 55
- Transportation:
- Transportation industry rules, for business meals, 57
- Travel expenses:
- VCSP (Voluntary Classification Settlement Program), 101
- Vehicle expenses:
- actual expenses, 51, 52
- apps for recordkeeping, 53
- business driving, 50–51
- buying versus leasing, 55, 161
- deductions, figuring, 51
- depreciation, 51, 52
- heavy SUVs, 52
- lease, getting out of, 55–56
- log, sample, 54
- mileage rate, 51, 52
- non-personal-use vehicles, 52
- recordkeeping requirements, 53, 54
- recordkeeping strategies, 53
- sampling, 55
- special vehicles, rules for, 52
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