Deductions and Write-Offs
The most frequently asked tax questions related to Deductions and Write-Offs
Can I claim the part of my living room that has my computer as an home office deduction?
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
In general, if you use a part of your home for both personal and business purposes, then no expenses for business use of that part are deductible. There are certain exceptions for the storage of inventory or samples used in a business or for qualified day care providers. You should speak to your local CPA about the "office in home" deductions.
How do I get a Social Security number for my non-resident alien dependent ?
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
You need to fill out Form SS-5-FS, which can be obtained either from your local CPA or from the Social Security Administration. The SSA website is http://www.socialsecurity.gov, . In addition to using the SSA website, you can call SSA toll-free at 1-800-772-1213.
Donated artwork - Appraiser fees
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
The appraisal fees you paid to determine the fair market value of your donated artwork is not deductible as part of the contribution. The fees would be considered a miscellaneous itemized deduction reported on IRS Schedule A, subject to the 2% AGI limitation.
Is there a web site to verify a qualified organization for a charitable contribution?
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
The IRS created a list of qualified tax exempt organizations for purposes of a charitable contribution deduction.
The list is included in IRS Publication 78. It can also be accessed at http://www.irs.ustreas.gov/bus_info/eo/eosearch.html
Should I not report the interest income that was reported on Form 1099-INT, that was incorrectly sent to me ?
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
In order to avoid any future problems and to avoid any mismatching reports with the IRS, you should include this amount on IRS Schedule B both as a positive and negative amount. Enter the Form 1099-INT amount on Schedule B, line 1 as income. Enter the same amount as a negative adjustment on Schedule B, line 1 and enter "Nominee Distribution" as the negative adjustment description. Speak to your local CPA if you have any questions about the reporting of this incorrect interest.
When are business meals and entertainment expenses deductible?
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
Generally, meal or entertainment expenses will be deductible with certain limitations as long as the meal or entertainment expenses are "directly related to" or "associated with" the active conduct of your trade or business and are not extravagant or lavish under the circumstances. Deductions are generally limited to 50% of the cost. Detailed recordkeeping should be kept to verify the deductions.
Some locations considereed as entertainment venues are: nightclubs, cocktail lounges, theaters, golf and athletic clubs, country clubs, and sporting events.
Is the yacht rental cost I paid to entertain my customers deductible?
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
You may not deduct the cost of renting, maintaining or operating facilities to entertain. Examples of facilities would include yachts, boats, lodges, fishing camps, apartments, hotel suites or homes in a vacation area. The no-deduction rule applies to rent, depreciation, maintenance and operating expenses. It does not apply to the food and beverage costs incurred when entertaining in the facility.
Gifts - business gift limitation
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
Generally, the deduction for business gifts is limited to $25 a year for each recipient if the gift is made to an individual.
There is no dollar limit on the deductibility of a business gift made to a corporation, partnership or business entity. Gifts to a corporation or other business entity intended for the eventual use or benefit of an owner, shareholder or employee is subject to the $25 limitation.
There is no dollar limit on the deductibility of a business gift made to a corporation, partnership or business entity. Gifts to a corporation or other business entity intended for the eventual use or benefit of an owner, shareholder or employee is subject to the $25 limitation.
Are my tolls and parking costs deductible if I use the optional business mileage allowance method?
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
Yes. Whether you choose the actual auto expenses, including depreciation or lease payments, or use the mileage allowance method, you can still deduct the actual business tolls and parking expense costs. You should maintain a record of the expenses and keep your receipts to verify the deduction.