From start-up to success, you need to Deduct It!
Completely updated for 2008
The fastest way for any small business to make more money is to pay less to the IRS. Let Deduct It! show you how to maximize the business deductions you're entitled to -- quickly, easily and legally.
Comprehensive -- yet easy to read with many interesting and relevant examples -- the book is organized into practical categories featuring common deductions, including:
start-up expenses
operating expenses
health deductions
vehicles
travel
entertainment
meals
inventory
equipment
and many more
The 4th edition is completely updated with all the latest tax information and numbers for 2008, and provides new information on tax planning. Whether your business is just starting or well established, Deduct It! is indispensable to your venture.

Tax Deduction Basics
The tax code is full of deductions for businesses -- from automobile expenses to wages for employees. Before you can start taking advantage of these deductions, however, you need a basic understanding of how businesses pay taxes and how tax deductions work. This chapter gives you all the information you need to get started. It covers:
how tax deductions work how businesses are taxed how to calculate the value of a tax deduction, and what businesses can deduct.
A. How Tax Deductions Work

A tax deduction (also called a tax write-off) is an amount of money you are entitled to subtract from your gross income (all the money you make) to determine your taxable income (the amount on which you must pay tax). The more deductions you have, the lower your taxable income will be and the less tax you will have to pay.
Types of Tax Deductions
There are three basic types of tax deductions: personal deductions, investment deductions, and business deductions. This book covers only business deductions -- the large array of write-offs available to business owners.
Personal Deductions
For the most part, your personal, living, and family expenses are not tax deductible. For example, you can't deduct the food that you buy for yourself and your family. There are, however, special categories of personal expenses that may be deducted, subject to strict limitations. These include items such as home mortgage interest, state and local taxes, charitable contributions, medical expenses above a threshold amount, interest on education loans, and alimony. This book does not cover these personal deductions.
Investment Deductions
Many people try to make money by investing money. For example, they might invest in real estate or play the stock market. These people incur all kinds of expenses, such as fees paid to money managers or financial planners, legal and accounting fees, and interest on money borrowed to buy investment property. These and other investment expenses (also called expenses for the production of income) are tax deductible, subject to certain limitations. Investment deductions are not covered in this book.
Business Deductions
People in business usually must spend money on their business -- for office space, supplies, and equipment. Most business expenses are deductible, sooner or later, one way or another. And that's what this book is about: the many deductions available only to people who are in business (sole proprietors, independent contractors, and small business owners).
You Only Pay Taxes on Your Business Profits
The federal income tax law recognizes that you must spend money to make money. Virtually every business, however small, incurs some expenses. Even someone with a low overhead business (such as a freelance writer) must buy paper, computer equipment, and office supplies. Some businesses incur substantial expenses, even exceeding their income.

 

From start-up to success, you need to Deduct It!
Completely updated for 2008

Introduction
1. Tax Deduction Basics
2. Beating the Hobby Loss Rule
3. Start-Up Expenses What Are Start-Up Expenses?
4. Business Operating Expenses
5. Deducting Long-Term Assets
6. Inventory
7. Office Expenses
8. Car and Local Travel Expenses
9. Business Travel
10. Meal and Entertainment Expenses
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) Individual Retirement Accounts -- IRAs Employer IRAs Keogh Plans Solo 401(k) Plans
13. Medical Expenses
The Personal Deduction for Medical Expenses Deducting Health Insurance Premiums 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 Gifts Insurance for Your Business Interest on Business Loans Legal and Professional Services Taxes and Licenses Domestic Production Activities
15. Record Keeping and Accounting
Basic Record Keeping for Tax Deductions Records Required for Specific Expenses How Long to Keep Records What If You Don't Have Proper Tax Records? Accounting Methods Tax Years
16. Claiming Tax Deductions for Prior Years
Reasons for Amending Your Tax Return Time Limits for Filing Amended Returns How to Amend Your Return How the IRS Processes Refund Claims
17. Staying Out of Trouble With the IRS
What Every Business Owner Needs to Know About the IRS Ten Tips for Avoiding an Audit
18. Help Beyond This Book
Secondary Sources of Tax Information The Tax Law Consulting a Tax Professional
Index

"For more information on how to handle inventory and write off the cost of goods, see…Deduct It! Lower Your Small Business Taxes."

 

"Delves deeply into the complex thicket of available deductions, with real-life examples on deducting everything from start-up expenses to car and travel expenses and the costs of benefits."

 

"Offers basic information and examples in plain English on how businesses are taxed and how to maximize deductions that the IRS considers legitimate."

 

Stephen Fishman is the author of many Nolo books, most recently Tax Deductions for Professionals. Other titles include Deduct It! Lower Your Small Business Taxes, Every Landlord's Tax Deduction Guide and Home Business Tax Deductions: Keep What You Earn—plus many other legal and business books. He received his law degree from the University of Southern California in 1979. After time in government and private practice, he became a full-time legal writer in 1983.

 

Deduct It! by Stephen Fishman
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