Tax Deductions for Professionals Book

Your Tax Deduction Companion

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

4. Meal and Entertainment Expenses
What Is Business Entertainment?
Who You Can Entertain
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 forSection 179 and Depreciation
Leasing Long-Term Assets

10. Start-Up Expenses
What Are Start-Up Expenses?
Starting a New PracticeBuying 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 Personal Deduction for Medical Expenses
Self-Employed Health Insurance Deduction
Deducting Health Insurance as an Employee Fringe Benefit
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