Deduct It!

Lower Your Small Business Taxes

Deduct It!

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Deduct It!

New Edition!

, 15th Edition

Reduce your taxes

Take all the business tax deductions you're due! Write off travel expenses, medical costs, meals, and much more. With Deduct It!, learn about and take common deductions on your 2018 tax return, including:

  • start-up expenses
  • inventory
  • equipment
  • and more!

This new edition is completely updated to cover the new Tax Cuts and Jobs Act.

See below for a full product description.

 

Available as part of the Nolo's Small Business Tax Bundle

Product Details

Completely updated for 2018 returns!

Deduct It! shows you how to maximize your business deductions—quickly, easily and legally. Whether your business is just starting or well established, this book is indispensable to your financial success. It covers deductions for:

  • start-up and operating expenses  
  • travel and meals
  • home offices
  • medical expenses
  • equipment and inventory,
  • and more.

Learn about the new tax law and how it affects small business owners, including the new 20% pass-through deduction and changes to entertainment and other business deductions and credits. Easy to read and full of real-world examples, Deduct It! will pay for itself many times over.

 

“Outlines the many deductions available to small businesses—in plain English.”-National Federation of Independent Business

“Delves deeply into the complex thicket of available deductions, with real-life examples on deducting everything.”-Accounting Today

“For more information on how to handle inventory and write off the cost of goods, see…Deduct It! Lower Your Small Business Taxes.”-San Francisco Chronicle

ISBN
9781413325706
Number of Pages
416

About the Author

Table of Contents

1. Tax Deduction Basics

  • How Tax Deductions Work
  • How Businesses Are Taxed
  • The Value of a Tax Deduction
  • What Businesses Can Deduct
  • Businesses That Lose Money

2. Are You Really in Business?

  • What Is a Business?
  • Tax Consequences of Being a Hobbyist

3. Start-Up Expenses

  • What Are Start-Up Expenses?
  • Starting a New Business
  • Buying an Existing Business
  • Expanding an Existing Business
  • When Does a Business Begin?
  • Claiming the Deduction
  • If Your Business Doesn't Last 15 Years
  • Organizational Expenses

4. Business Operating Expenses

  • Requirements for Deducting Operating Expenses
  • Operating Expenses That Are Not Deductible
  • Tax Reporting

5. Deducting Long-Term Assets

  • What Is a Long-Term Asset?
  • Deducting Inexpensive Property: The De Minimis Safe Harbor and Materials and Supplies Deduction
  • Deducting Long-Term Personal Property: Bonus Depreciation, Section 179, Regular Depreciation
  • Bonus Depreciation
  • Section 179 Expensing
  • Deducting Repairs and Improvements
  • Regular Depreciation
  • Deducting Real Property
  • Intangible Assets
  • Tax Reporting and Record Keeping
  • Leasing Long-Term Assets

6. Inventory

  • What Is Inventory?
  • Deducting Inventory Costs

7. Office Expenses

  • Qualifying for the Home Office Deduction
  • Corporation Employees
  • Calculating the Home Office Deduction
  • Simplified Home Office Deduction method
  • IRS Reporting Requirements
  • Deducting an Outside Office or Workplace

8. Car and Local Travel Expenses

  • Deductible Local Transportation Expenses
  • The Standard Mileage Rate
  • The Actual Expense Method
  • How to Maximize Your Car Expense Deduction
  • Other Local Transportation Expenses
  • When Clients or Customers Reimburse You
  • Reporting Transportation Expenses on Schedule C
  • Corporations, LLCs, and Partnerships

9. Business Travel

  • What Is Business Travel?
  • What Travel Expenses Are Deductible
  • How Much You Can Deduct
  • Maximizing Your Business Travel Deductions
  • How to Deduct Travel Expenses
  • Travel Expenses Reimbursed by Clients or Customers

10. The Pass-Through Tax Deduction

  • You Must Have a Pass-Through Business
  • You Must Have Qualified Business Income
  • You Must Have Taxable Income
  • Deduction for Taxable Income Below $157,500 ($315,000 for Married)
  • Deduction for Income Above $157,500 ($315,000 for Married)
  • Taking the Pass-Through Deduction
  • Strategies to Maximize the Pass-Through Deduction

11. Hiring Workers

  • Employees Versus Independent Contractors
  • Tax Deductions for Employee Pay and Benefits
  • Reimbursing Employees for Business-Related Expenditures
  • Employing Your Family or Yourself
  • Tax Deductions When You Hire Independent Contractors

12. Retirement Deductions

  • Why You Need a Retirement Plan (or Plans)
  • Employer IRAs
  • Keogh Plans
  • Solo 401(k) Plans

13. Medical Expenses

  • The Affordable Care Act (Obamacare)
  • The Personal Deduction for Medical Expenses
  • Deducting Health Insurance Costs
  • Tax Credits for Employee Health Insurance
  • Adopting a Medical Reimbursement Plan
  • Health Savings Accounts

14. Additional Deductions

  • Advertising
  • Business Bad Debts
  • Casualty Losses
  • Charitable Contributions
  • Clothing
  • Dues and Subscriptions
  • Education Expenses
  • Entertainment and Meals
  • Gifts
  • Insurance for Your Business
  • Interest on Business Loans
  • Legal and Professional Services
  • Taxes and Licenses

15. Record Keeping and Accounting

  • What Records Do You Need?
  • Records Required for Specific Expenses
  • How Long to Keep Records
  • What If You Don’t Have Proper Tax Records?
  • Accounting Methods

16. Staying Out of Trouble With the IRS

  • What Every Business Owner Needs to Know About the IRS
  • Eight Tips for Avoiding an Audit

Sample Chapter

Introduction

 

Few of us ever test our powers of deduction, except when filling out an income tax form.
—Laurence J. Peter

 

If you are truly serious about preparing your child for the future, don’t teach him to subtract—teach him to deduct.
—Fran Lebowitz

 

The goal of this book is to help you, the small business owner, pay less federal tax so you can keep more of your hard-earned dollars. The trick to paying lower taxes is to take advantage of every tax deduction available to you.  A potentially huge array of deductions is available to businesses of all sizes, but you need to know they exist and understand how to use them.

Remember, the IRS will never complain if you don’t take all the deductions you are entitled to. In fact, the majority of small businesses miss out on many deductions every year simply because they don’t know about them—or because they neglect to keep the records necessary to back them up.

That’s where this book comes in. We explain all the most valuable business deductions and show you how to deduct all or most of your business expenses. Learn how to take and properly document your travel, home office, and operating expenses, depreciation, and other deductions. Even if you work with an accountant or another tax professional, you need to understand business deductions. With this book, you will learn how to keep better records, ask better questions, obtain better advice and—just as important—evaluate any information you get from tax professionals, websites, and other sources. If you do your taxes yourself, your need for knowledge is even greater. This book can be your guide—providing you with practical advice and information you need to rest assured that you are not missing out on valuable deductions.

This year more than ever, you’ll need guidance when it comes to understanding your taxes. Congress passed the Tax Cuts and Jobs Act at the end of 2017, the most sweeping change to the tax code in over 30 years. Most of those changes go into effect starting in 2018. We explain the new tax law and how it affects small business deductions including:

  • new individual and corporate tax rates (see Chapter 1)
  • a new 20% tax deduction for pass-through business owners (see Chapter 10)
  • changes to bonus depreciation and Section 179 expensing, including substantial increases in the annual limits (see Chapter 5)
  • changes to the annual depreciation deductions allowed for passenger automobiles (see Chapter 8)
  • the elimination of deductions for business-related entertainment and certain meals (see Chapter 14)
  • new limits on deducting business losses (see Chapter 1)
  • new limits on deducting interest for larger businesses (see Chapter 14), and
  • changes affecting the cash method of accounting and deducting inventories (see Chapters 6 and 14).

This book is for anyone who owns a business, including self-employed businesspeople; sole proprietors; professionals who own their own practices; those engaged in part-time or sideline businesses; consultants, freelancers, and independent contractors; owner-employees of small corporations; partners in business partnerships; and members of limited liability companies. If you are an employee of a business you do not own, this book does not cover your situation. Nor is this book a tax preparation guide—it does not show you how to fill out your tax forms.

By the time you do your taxes, it may be too late to take deductions you could have claimed if you had planned the prior year’s business spending wisely and kept proper records. To avoid this sad (and expensive) fate, you can (and should) use this book all year long to make April 15 as painless as possible.

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