Stop Paying Taxes On Unclaimed Expenses

By Karen Y. Bryant

Make the most of expenses incurred when operating your small business and stop paying taxes on unclaimed deductions. Know which expenses, deductions, and credits to claim when filing your taxes each year for the largest refund possible. Infuse your business with the cash needed for operations and growth at tax time with the help of this small business guide to deductions - a must have for every new small business owner!

• Language: English
• Publisher: Lulu.com
• Release date: Mar 15, 2015
• ISBN: 9781312992900

Book preview

Stop Paying Taxes On Unclaimed Expenses

STOP PAYING TAXES

on Unclaimed Expenses

Small Business Guide to Deductions

Karen Y. Bryant

Copyright © 2015 Karen Y. Bryant

All Right Reserved except where permitted under the U.  S.  Copyright Act of 1976. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic or otherwise without prior written permission of the copyright holder.

ISBN: 978-1-312-99290-0

March 2015

Table of Contents

Introduction

Starting a Business

Deductible Startup Expenses

Business Activity

Cost of Products and Services

Business Income

Other Forms of Income

Exceptions to Income

Business Credits

Business Expenses

Deductible Expenses, Itemized

Deductible Depreciation Expenses

Deductible Business Use of Your Home Expenses

Travel, Meals and Entertainment Expenses

Financial Statements

Trial Balance

Balance Sheet

Income Statement

Summary

Introduction

Elements of a successful business are numerous and would certainly include, although they may or may not be limited to, marketable products or services, targeted marketing and promotions, repeat customer or client sales and quality customer service, effective and efficient tracking of income and expenses, and of course, strategically acquired liabilities.  New businesses could find themselves less profitable, and thus less successful, in part due to the poor management of their finances.  Failure to accurately record expenses could cost the new business owner in the form of taxes paid on otherwise deductible expenses and credits that could ultimately reduce his or her taxable income and subsequent personal tax liability.

As a new business owner, it is understood that the last thing you want is to be stuck doing paperwork.  You are probably more focused on the production and availability of your products or services for a perceived customer or clientele, securing limited marketing to target a perceived customer or clientele, and funding the direct cost of materials, supplies, and other expenses associated with your products or services.  Much less thought might be given to recording expenses, least of all those expenses that are intangible, such as mileage or depreciation of your equipment or vehicle, business use of your home, insurance coverage, interest payments and personal property taxes.  However, being serious about your success as a business owner, you’ve chosen to be serious about your business finances.  Therefore, I will address the most common relevant expenses so that you might realize the true cost of providing your products or services, and thus your true net profit (or loss).

Specific bookkeeping entries and software programs (or the treatment of specific income or expense items) may be referenced, but not discussed in detail.  Reference to your tax professional is made to emphasize the importance of maintaining supporting documentation that would ensure the accuracy of qualified deductions and credits.  Additionally, reference made to specific IRS publications and forms is intended for the purpose of further clarification and, or a source of more detailed information.

This material has been compiled to assist the new small business owner in his or her obligation to meet Internal Revenue Service (IRS) requirements concerning documented income and expenses as represented on tax forms and financial statements.  Keeping in mind the old adage, Garbage in, Garbage out, I will attempt to help you as a small business owner, identify and track information needed to determine and document business income and expenses – direct and indirect, tangible and intangible.  In doing so, you could then realize a larger tax refund (or lower personal tax liability) during a time in which your business would need it most.

Important Note:  Reduced taxable income could impact qualifications for other, non-business credits and your subsequent refund, which is not addressed in this material.

Starting A Business

Congratulations on your decision to start a small business venture as a Sole Proprietorship.  The US Government would like to encourage the success of your business and the potential for growth through tax deductions and credits – even before you open your doors for operations.  This small business guide to deductible expenses will help you take advantage of those tax deductions and credits by providing you with basic information regarding their existence and (in most cases) preliminary or basic requirements that must be met in order to qualify expenses.  Additionally, you will be directed to more detailed information when available.

Tax deductions for your business allows you to recover expenses or money spent to produce income so that, when subtracted from business income (such as sales and other business revenue), what remains is easily identified as taxable business income or business profit that increase or decrease your total income.  These qualified business costs and expenses must be handled in a