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

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

Jack asked:


I’m thinking about turning my online selling into a business, and I’m trying to get a feel for the tax-related pros and cons of making it official.

Here are 2 questions:
(1) I understand that I can write off business expenses on my tax returns. That includes computer equipment, trips overseas to purchase merchandise, etc. But I’ve never itemized my tax return before. Would I get more money back if I start a business, and then itemize my deductions rather than just taking the default deduction like I always do?

(2) If I make my online selling into an official business, will I have to pay extra business-related taxes?

Coral Bellantone

dgitts asked:


I filed my last year (2008) taxes for my personal DBA biz and did not include expenses for the business and now I end up having to owe more than I had accounted for. I want to find out if I call IRS and explained to them that in the course of the biz I incurred business expenses such as gas, supplies, repairs, vehicle maintenance, food and ent., and of course I do not have all my receipts but a bank statement to back my claims, will they accept it and possibly steer clear of an audit?

Jane Boulette

Amanda Sue asked:


I have 7 people who send me receipts for business expenses on a few different accounts. Is there an easy way to organize them?

Freddy Brooker

ok asked:


I want to start understanding correctly what is a business expense and what is not? Especially when it comes to Dining out for Lunch or Dinner, Gasoline, and auto insurance…

Doyle Banis