Expenses-Get Free Tips On Business Expenses, Living Expenses, FSA Eligible Expenses

StephenWeinstein asked:


Someone had an idea for what a new product would do. I figured out how to build one. To build a prototype and e-mail him pictures, I bought 4 things: 2 things that I canabalized for parts and 1 soldering iron and 1 camera. The plan is to form an LLC jointly, but this has not yet be done.

For several years, I used to do consulting work providing engineering services as an independent contractor and receive a 1099-MISC. I never officially terminated that business, but have not received income from it since becoming a W-2 employee in 2005.

Can I deduct the items listed above as business expenses? Are they “supplies” or are they section 179 tangible personal property?

Since we have not formalized our relationship, or we a partnership or sole proprietors?

What should I check on the box that asks about passive activity versus material participation? I did all of the development and found a patent lawyer (<100 hrs). He solicited manufacturers (with no luck).
I canabilized two existing products to use their electrical or electronic circuitry NOT HUMAN PARTS. I want to know if I can deduct the cost of these two items, plus the camera and soldering iron. Also, do I depreciate them, or are they supplies?

I also burned the dining room table with the soldering iron or the solder. Is that a business expense (Schedule C) or a personal casualty loss (Schedule A).

Moira Marquart

therealdank asked:


Hello,

I am wanting to do my taxes myself this year and I am kinda confused with deductions. I am going to use “STANDARD DEDUCTION” this year and I know that I can itemize a few things like business related expenses with my standard deduction. I thought I couldn’t write off business deduction becouse it was either standard deduction or itemized deductions, this is true but I talked to a few people at jackson hewitt and they told me that I can write off business expenses with a standard deduction. I wanted to get you guys input as well as ask what are exact things I can write off for business expenses while using a standard deduction. If you have a webpage I can visit to answer my question that would be wonderful too. I know you guys are pros so thats why I am coming to you for my questions.

Thank you so much for your time and all of you input will be highly valued and used.

Take care!

Theodore Biorkman

Xena Warrior Princess asked:


Can you backdate on business expenses when filling out a DBA?

Let’s say, I payed someone to make my business logo on June 1st. I fill out the DBA on June 15th (because the process took long). Can I backdate to that bill for the logo?

My question is general, meaning, I’m not looking for a certain time frame because if there is one, it will probably vary according to city/state. My question is, is this possible at all?
When I can start recording expenses for accounting or income tax purposes.

Renita Grave

answerme asked:


what is the safe % of expenses of a company income for a small business ?

Waylon Dozer

Jerry 71 asked:


The small business here is operating at a loss. The expenses exceed the income and the business is being propped up by loans from the owner’s savings. There are deductions for business expenses, but the business runs into the alternative minimum tax and not all of the tax deductible expenses can be deducted. Refunds (partial refunds) are frequently given to customers because they pay a deposit. The entire deposit is deposited when paid and is considered income. Though the partial refunds are “tax deductible” I am concerned because of the low income and high expenses making it impossible to get the full deduction for expenses. Any suggestions for making the best of this situation? Essentially, we sometimes pay tax on money that ends up being refunded to the customer. Thanks.

Jerrod Narron

FutureCPA asked:


I’m preparing a tax return for a fictional company as an assignment. The company has the following expenses (no other information is given):

Wages
Advertising
Supplies
Materials and supplies used for inventory
Rent
Property insurance

In filling out Schedule C, I’m a little bit confused which expenses go where. I could definitely see Wages as being direct labor and the following as being overhead:

Advertising
Rent
Property insurance

But in looking at Part II of Schedule C, there is a line for Insurance which the IRS defines as “business insurance”. Also, there is a spot for wages on Line 26.

So, how do I decide where to list the information?

Charlie Seifert

Geoff K asked:


If I trade securities with money from my S corp and sell with gains, will the other expenses of the business (payroll, advertising, etc.) of my corp offset taxable income? Note that the S corps’s primary business is not trading. Is that an issue?
What lead you to think this was a “dis-regarded entity”? While it is an LLC, it is an LLC that was granted to be taxed as an S corp. If still this is true, how can I make it so that I can conduct my primary business but not be seen as “disregarded” by the IRS and to have any normal business expenses reduce any gains.

Randall Williams

Nick asked:


I plan to file the paperwork to start either an LLC or INC later this month for a web-based business. (I’m still researching which will work best for our situation.) But, I’d like to get started on the web development immediately. If I buy web hosting, domain names, web software, etc. today, can I still write it off as a business expense after I’ve officially created the business?

Meghan Johansson

psychosolodiver asked:


If I start blogging about my life with the intent on making a profit, can I write off things like rent, food, gasoline and vacations off as business expenses?

Chris

Shay nay nay asked:


I have a small business set up as a general partnership and we have 2 employees. We are not using any kind of 3rd party administrator for payroll or tax reporting services. We are just keeping tight records of our income, business expenses and payroll. Can we file taxes for this busines at the end of the year along with our personal filings or should we be doing something different? Also, we have not been withholding any taxes from our employees payroll as we plan to issue them a 1099 at year end. Does this sound ok?

Chieko Lofaro