Deductions and Write-Offs
The most frequently asked tax questions related to Deductions and Write-Offs
Publication - auto expenses
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
IRS publication 463 deals with Travel, Entertainment and Car Expenses.
Artists - Car expenses
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
If you meet certain requirements to be identified as a "Performing Artist" you can deduct all of your car expenses as a adjustment to income directly on Form 1040 instead as a itemized deduction on Schedule A. There is a 5 step requirement test that must be answered before a person is identified as a Performing artist.
Leased auto - income inclusion?
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
If you leased a vehicle for more than 30 days and you deduct the lease charges as opposed to using the standard mileage allowance then you must add to your income a income inclusion amount which is based on a IRS table. IRS pub 463 has the lease tables.
Bonus depreciation limit for vehicles
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
Bonus first year depreciation for vehicles placed in service in the current year that were new and used over 50% for business is $11,160 for auto's and $11,360 for light trucks and vans.
Bonus depreciation - vehicles
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
Bonus first year depreciation for vehicles placed in service in the current year that were new and used over 50% for business is $11,160 for auto's and $11,360 for light trucks and vans.
How do I prove that the home office is used as a principal place of business?
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
Examples of substantial management and administrative activities that would substantiate a home office deduction include billing clients, customers or patients, maintaining books and records, writing reports, scheduling appointments, ordering supplies, reading professional or trade journals.
What documentation is needed to deduct a home office?
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
In addition to actual receipts of expenses paid, It is a good idea to photograph your home office and keep it with the tax return it is being claimed on. This would add to the proof requirement of business use exclusivity.
How do I allocate indirect expenses in my home office?
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
Generally the number of rooms identified as the home office divided by total rooms equals your percentage of business use.
What expenses are deductible in my home office?
Asked Monday, November 28, 2011 by an anonymous userCPA Answer:
Expenses directly allocated to the home office such as painting the office or buying furniture for the office are 100% deductible. Other expenses indirectly incurred are deductible at a business expense allocation percentage. These would include Real estate taxes, mortgage interest, depreciation, utilities, rent, insurance, snow removal and security.