Deductions and Write-Offs

Generally, the IRS requires 2 types of records for substantiation. You should maintain a diary (calender diary recommended)or account book to list the place, time, who you met with, and the business purpose of your travel and entertainment. Receipts, itemized bills or similar statements for lodging are needed regardless of the amount.For other expenses of $75 or more a receipt is needed. A bill should show the amount of the expense, the date of the expense, where the expense was incurred and the nature of the expense.

No. As a cash basis taxpayer you cannot claim a bad debt loss for salary that was earned but not paid to you.

Individuals who make charitable contributions to charitable organizations in excess of the deductable 50%,30%,20% AGI ceiling for the tax year may carry this excess deduction forward for a period of 5 years.

A noncustodial parent may claim his or her child(ren) on his or her tax return if the custodial spouse signs IRS Form 8332.
It is the Release of Claim to Exemption for Child of Divorced or Seperated Parents.
The signed Form 8332 must be attached to the noncustodials tax return each year. A noncustodial parent can ask the custodial parent to sign Form 8332 Part I which is a release of Claim to Exemption for future years.
If this part is signed then the noncustodial parent may photocopy this form each year and attach it to the tax return.

Taxpayers are entitled to deduct any expenses for using their homes for business purposes if the expenses are attributable to a portion of the home or separate structure used Exclusively and On A Regular Basis as the principal place of any business carried on by the taxpayer (occasional use is not sufficient) or a place of business that is used by clients, customers, patients, in meeting or dealing with the taxpayer in the normal course of business. If the taxpayer is an employee, the business use of the home must also be for the convenience of the employer. A home office deduction may be claimed if the taxpayer regularly and exclusively uses part of the home for conducting the administrative or management activities of the business. Home office expenses may include real estate taxes, mortgage interest and operating expenses such as insurance and utilities and also depreciation. Home office deductions may be limited. The allowed deduction is calculated and reported on IRS Form 8829 and then transferred to the taxpayers Schedule C. There are certain tax consequences of claiming a office in the home deduction. A consequence occurs when the taxpayer sells his residence. Current law allows a $500,000 exclusion on the sale of a residence ($250,000 for non joint returns). If a residence is sold with a home office, the gross sales price must be apportioned over the residence and the business office. A taxable gain on the sale may occur. If a residence is sold without a home office the full exclusion may be taken. Some CPA's suggest not claiming a office in your home for the two years prior to the sale of the residence. Speak to your local CPA about your specific circumstances to work out a strategy that works for you.

Costs incurred in entertaining customers, prospective customers, clients, suppliers, employees and other business associates are valid business expenses that are subject to conditions and restrictions.
For entertainment costs to be deductible, the following must be documented; the time, place and the nature of the entertainment, a description of the business purpose involved, the amount of each separate expense, the business relationship and identification of the persons entertained.
A calendar diary is recommended to maintain this information.

The first year limit for cars placed in business service in the current year is $11,160, if you elect the special depreciation allowance for qualified passenger auto's.

Land is not depreciable.

Farmland is not depreciable. Farm Buildings and machinery used on the farm are depreciable.