Home Business Tax Deductions: Keep What You Earn Paperback – Nov 2010
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"Fishman translates complicated tax-law jargon into words you can understand and apply to your home-based business without a CPA." Paul Tulenko, syndicated business columnist
About the Author
Stephen Fishman is the author of many Nolo books, including Tax Deductions for Professionals, Deduct It! Lower Your Small Business Taxes, Every Landlord's Tax Deduction Guide and Home Business Tax Deductions — plus many other legal and business books. He received his law degree from the University of Southern California. After time in government and private practice, he became a full-time legal writer.
Inside This Book(Learn More)
Most Helpful Customer Reviews on Amazon.com (beta)
For me, this book is a GOLDMINE of information! I am so thrilled to have it--it answered all of my questions and will serve as a valuable tool throughout the year.
It starts with the basics: Using personal stories and examples that are applicable to a home business owner, the author begins with describing how deductions work, how business are taxed, and how you can use this information to best benefit you, to get the greatest value from your deductions.
You have to prove you are a real business and this book teaches you exactly how to do that. I remember back in the 80's you could just create a business so that your hobby could be a tax deduction. Not anymore.
Start up expenses: There are certain expenses you can write off, and some you cannot. There are certain rules you have to follow when you start a business, and there are even accomodations for businesses that never actually get off of the ground. There are also pitfalls (set ups, in my opinion) within the IRS that will bit you in the butt if you don't handle them properly--which this book tells you exactly how to do. Inventory is covered--how to start it up, maintain it, and deduct the costs thereof. It walks you through how to report your inventory to the IRS.
Operating in your home gives you certain tax benefits (we all know that). But, again, unlike the 80's, where you could write off soooo much, now those write offs are limited. This book lays out exactly what those limitations are and how to make the most of your write offs. It walks you through the Home-Office deduction and how to meet the IRS requirements for your deduction(s).
Long-term assets, depreciation, special tax forms--all covered in this book.
We've all heard about meal, entertainment, car, local and business travel expenses being great write offs. It's a lot harder now than in the past, but you CAN do it,and maximize those deductions with the tools in this book.
Now, part of my business includes hiring workers/contractors. This book covers all of it--employees or contractors; tax deductions and employee benefits, and even employing your family members and what that will entail , for you. It even goes over the NEW HEALTH CARE REFORM BILL and how it affects your business. It goes over medical expenses, insurance, tax credits, medical reimbursement plans, and health savings accounts. Wow.
Retirement? It's covered in this book. How to plan for YOUR retirement with a Retirement Plan (or plans). IRA's, employer IRA's, Keoghs, 401K's...it's all there.
It goes through lists of additional home business deductions, from advertising to charitable contributions, to education, to legal services...it's amazing--the more you read, the more you realize you "could have" written off.
It gives 10 tips to avoid an audit, previous year deductions and revisiting past tax years. SO much information is included in this book, I wish I could give you an adequate overview, but it'd be so long, you might as well buy the book. ;)
(10 Tips overview: Be Neat, Thorough, and Exact in your records and filings; Mail Your Return by Certified Mail; Don't File Early; Don't File Electronically; Form a Business Entity; Explain Items the IRS Will Question; Avoid Ambiguous or General Expenses; Report All of Your Income; Watch Your Income-to-Deduction Ratio; Beware of Abnormally Large Deductions...the book spends pages and pages describing each one of these in detail, but I thought this would pique your interest.)
There are spreadsheets and org charts to follow to make sure you are considering the right expenses for the right deductions. The examples are SO clear and concise, you can't mess it up.
If you own your own home business, or are considering starting up a home business, this book is mandatory for you!
And, if there are updates--you can even retrieve updates to the codes at their website, Nolo . com.
This book gives you a number of real-world examples and is a very easy read. Ypou'll be very surprised when you find this book is written ina very invisting and engaing way. You will definately learn so much in just the first few chapters and it will be a reference you return to often!
You will learn how to avoid the tax tragedy of being classified by the IRS as a hobby instead of a legitimate business. In fact, if you claimed any business deductions and were later found to be a hobby which can cost your more, you could find yourselves thousands of dollars in debt to Uncle Sam, thanks to back taxes and penalty fees. But this book gives very easy-to-implement techniques that will help you prove that you are, in fact, a business and hw to report it and most inmportantly keep accurate records for it.
In addition, it gives you the answers to common questions about what constitutes legitimate business deductions, from business lunches (does it count if you talk about business and pleasure?) to the cost of gas used to drive to grocery store with details on how to report it. Also, you can deduct the gas if you used the trip to purchase business supplies (such as paper or envelopes) along with your family's groceries and the details abut reporting them.
You'll also learn the ins and outs of the all-important home office deductions, business issues, along with the tax requirements of hiring workers and there needs, from full-fledged employees to independent contractors. Finally, this book gives ten tips to staying out of trouble with the IRS and avoid audits and pitfalls in taxes..
This book also translates complex tax laws into concepts that those of us who didn't attend law school can easily understand. Also it takes you step by step on where to go and what to do.
Home Business Tax Deductions is updated yearly to reflect changes to tax laws which as you know they change constantly. The paperback version is the best and complete with contents and guideto help your research. Another great No Lo learning tool. 2-2011
If you are even thinking about starting a home-based business, start with this book. It is a priceless resource and truthfully, they could sell this book for a few hundred dollars and it would be worth every single penny. We won't even need a tax consultant because of this book. Anything and everything you might have had a question about is covered in this book. It is filled with real-life scenarios and examples to give you a complete understanding of the tax laws. This went to press before some of the new laws, but they cover both sides of whether the "Bush Tax Cuts" would be extended or not, so you know the ramifications either way.
If you own a home biz, get this book and take a weekend to read it. You will definitely find additional deductions for your business, saving you lots of money!
I have a nascent home business that I have put off deducting on the advice of my accountant, and one of the first things I learned from reading this book was why that advice was offered, and that it was good advice! It is a legitimate home business, but I learned in the first chapter what kind of things can prompt an audit and what you need to do to establish that it is a legitimate bu8siness. I know that showing a loss for as many years as I would have, had I filed might have prompted an audit, and just as significantly, that I had not taken the right steps to show that it was a legitimate business. It looks like this book gives me the tools I need to get organized and have my paperwork in order so that when I am ready to file, I am prepared and doing things the way they ought to be done.
Among other things, I learned about the difference (in classification) between a "business" and a "hobby," both in terms of how the IRS views one vs the other, and the differences in deductions. (In fact, I did not know that a hobby could be deducted at all!) I know that I have some work to do to get my books in order, but armed with this book will be spared the trouble of doing it twice.
I had previously thought that putting off deductions meant I would lose my start up expenses, and I now know that they are treated differently (as capitol expedetures) and are expensed over many years, so putting off filing will not lose those deductions but they will be applied when it makes more sense.
In brief, the book helped me determine how my business would likely be treated (in its current state) and what I need to do to get it set up properly. He briefly discusses business forms, and goes into considerable detail on allowable deductions (and what is not); how to keep track of various expenses: inventory, travel, home office, wages, retirement, medical, miscellaneous expenses (e.g. entertaining, advertising, education, loan interest) as well as when a spouse or child can be treated as an emp-loyee.
I found that a good deal of the book was about red flags, and how to avoid them, but suspect this is par for the cour5se if there is a genuine problem with people abusing the tax laws (intentionally or not).
I suspect, ultimately, I will still wind up handing the paperwork to an accountant, but at least I will have maintained the correct paperwork and know when the time is right to file. (which is not to say that others might not be able to do it themselves, I just know my limitations).
My only compliant with this book is one I have found with all of the NOLO books I have read; it is lacking sample forms, templates or a cd which would have made filing easier. That said, I have found this particular book to be more useful and comprehensive than any of the other NOLO books I have read, and one which I feel I will come back to and use as a reference for years to come. (There is too much information to absorb reading through it once) In addition, he does tell you what forms you need and where to find them, and points to places where you might need to hire a professional, or more information.
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