Ask a CPA

Equipment that is used for personal and business purposes is called "listed property".
Listed property includes automobiles (weighing 6,000 lbs. or less), cellular telephones, computers and peripheral equipment,
property used for entertainment, recreation or amusement, such as boats, airplanes, and photographic, sound or video recording equipment.
There are certain limitations associated with listed property. Listed property deductions are reportable on IRS Form 4562, part 5.

No. You are allowed the maximum allowed expense amount of the Section 179 deduction even if you purchase the equipment and place it in service on the last day of the taxable year.

If the total cost basis of your business equipment was placed in service during the last 3 months of the tax year exceeds 40% of the total basis of all the property placed in service for the whole year, then a Mid-quarter convention applies.
Generally, the first year depreciation will be based as if the assets were placed in service in the middle of the last quarter of the tax year. This result will be a smaller first year calculation than the depreciation calculation using the half year convention.

Computer software used in a business or for investment purposes having a useful life of more than 1 year is depreciable over a 3 year life.

You must obtain the consent of the IRS prior to any changes in your accounting method. Use IRS Form 3115 to apply for this consent. File your application as soon as possible during the tax year.

You must file IRS Form 8300 within 15 days of receipt of more than a $10,000 cash transaction. There are penalties for failure to file Form 8300. Only cash payments require this additional reporting. Cash is money. It is currency and coins of the United States and any other country. Cash is also certain monetary instruments - a cashier’s check, bank draft, traveler’s check, or money order Funds received by check or wire transfers do not apply. Speak to your local CPA about the IRS reporting requirements. You can obtain copies of IRS/FinCEN Form 8300 by: Calling the IRS forms line at (800) 829-3676 : Downloading Form 8300 in English or Spanish: Visiting the FinCEN Web site A business should mail Form 8300 to: Internal Revenue Service Detroit Computing Center, P.O. Box 32621, Detroit, MI 48232

If you have self-employment income, then you can take a deduction for health insurance expenses incurred for yourself, your spouse, and your dependents. If you are reporting a loss from your self-employed activity, then you are not eligible to deduct your health insurance costs since this particular deduction is limited by your self-employment income

While 100% is reportable, only 50% of meals and entertainment are deductible on your business expense forms. • Be sure to keep good records on who was present, the dates and times, and the reasons for the entertainment and business discussions that took place. You may not deduct costs of meals and entertainment for personal reasons while traveling. If the trip is "primarily" business, most expenses will be considered as business expenses. If the trip is "primarily" personal and you conduct some minimal business, only those costs directly related to the business you conduct may be deductible.

Generally, the preliminary costs of investigating and setting up a business are amortized over a 60-month period. Startup expenses are things associated with setting up your business or investigating the purchase of an existing business.
Among the items that count as startup expenses: Doing an analysis of your potential market(s) , Paying for consultants , Buying initial supplies , Advertising your new business , Paying employees before the business opens .
Among the expenses that can qualify as an organizational cost: State incorporation fees , Lawyers' charges for drafting incorporation papers , Initial accounting fees .
For 2011 ONLY, You could have writen off up to $5,000 in business startup costs and another $5,000 in organizational expenses in the year that you start a business. (Note: These deductions are reduced if you have more than $50,000 of either type of expense.) Once you've written off that first $5,000, you can still get a tax benefit from other expenses. However, those startup costs will have to be written off, or amortized, over 15 years.
Depreciate your initial equipment and furniture - the assets you buy for your startup can be written off. However, unlike supplies and other expenses, assets have to be depreciated. There are different rules for different assets. Get a tax benefit for merchandise you first bought for yourself - If you've never used these items for business before, you could depreciate them, based on their value when you started using them in your business. Most office equipment, could be written off over seven years; computers can be deducted over a five-year period.
Whether it makes sense to take as many deductions of business startup costs as you can in the year you start a business depends on individual circumstances. In some cases, owners of startups may prefer to stretch out deductions over several years so that they balance out more evenly against eventual revenue streams. A tax pro can advise you on the best expense- and tax-planning strategies for your own startup venture.

To claim a home office expense you must be able to prove that you use the home area exclusively and on a regular basis. Generally, exclusivity would mean a place of business where you met with clients, customers or patients in the normal course of business. Your home office qualifies on a regular basis if you spend most of your working time there and most of your business income is attributable to the activity there. Business Income may limit your home office deductions. The disallowed amounts may be carried over to future years. Use IRS Form 8829 to claim the home office deduction. Speak to your local CPA about your potential home office deductibility.