Introduction: Before We Get Started.
1 The Lay of the Land.
Legislative, Administrative, and Judicial Authority.
The Audit Process and Your Appeal Rights.
Can I Completely Avoid Paying Income Tax?
2 What Is a Business for Tax Purposes?
Investing Cannot Be a Business.
Dealing or Trading Could Be a Business.
Rents from Real Estate.
Is It a Hobby or a Business?
Identifying Deductible Business Expenses.
Does It Pay to Be Creative?
3 Choices for Business Organization.
Limited Liability Companies (LLCs).
Which Form Is Best?
4 Tax Accounting Methods and Periods.
What Is a Method of Accounting?
The Cash Receipts and Disbursements Method.
The Hybrid Method.
Which Method Is Best for You?
5 How to Account for Inventory.
When Is Inventory Required?
The Accrual Method Requirement.
The Small Taxpayer Exception under Revenue Procedure 2001-10.
The Small Business Exception under Revenue Procedure 2002-28.
Changing Your Accounting Method.
Inventory Methods When the Exceptions Don’t Apply.
6 Business, Sales, and Use Taxes.
State and Local Business Taxes.
Federal Estimated Tax Payments.
General State Taxing Authority for Income Taxes.
General State Taxing Authority for Sales and Use Taxes.
The Streamlined Sales Tax Project.
What to Do before Making Sales.
7 Limitations on Use of Your Home.
Why Pick on Us?
A Quick Summary of the Restrictions.
Is Your “Home” Where You Think It Is?
Regular Use of a Home Office.
Exclusive Means Exclusive!
What Is Your Principal Place of Business?
A Place to Meet Patients, Clients, or Customers.
The Use of Separate Structures.
Use as Storage Space.
Application of Section 280A Business-Use Tests to Partnerships and Corporations.
8 Form 8829 Line by Line.
Determining the Part of Your Home Used for Business.
Figuring Your Allowable Deduction.
Depreciation of the Business Portion of Your Home.
An Example Using Form 8829 and Form 4562.
9 Planes, Trains, and (Especially) Automobiles.
Travel Away from Home.
Your Car: Standard Mileage Rate versus Actual Expenses.
How to Report Travel and Transportation Deductions on Your Return.
10 Other Common Business Deductions.
Who Deducts What, Where?
Depreciation of Personal Property.
Books, Subscriptions, and Supplies.
Meals and Entertainment.
Business Liability Insurance.
Health Insurance and Medical Savings Accounts.
Wages for Home-Office Workers.
Retirement Plans for the Self-Employed.
11 Sale of Your Residence.
The Sale of a Principal Residence Before and After the Taxpayer Relief Act of 1997.
Reporting Post-Taxpayer Relief Act of 1997 Sales.
Should You Always Claim Home-Office Deductions?
12 Records You Better Keep.
General Bookkeeping and Substantiation Requirements.
Special Substantiation Requirements.
When Is It Safe to Throw Stuff Away?
13 A Comprehensive Example.
The Home Office.
Other Return Items.
Estimated Tax Payments for 2006.