By month: December 2007

Commissioned Employees Beat AMT by Claiming Independent Contractor Status

The dreaded alternative minimum tax (AMT) taxes the regular tax deductions claimed for employee business expenses. These taxpayers said, “enough” and took their cases to court where they won their deductions by claiming employee business expenses on Schedule C.

Standard Mileage Rate 50.5 Cents for 2008: Gift or Rip-Off?

Compare IRS rates with actual expenses to find what’s best for you. Should you choose IRS mileage rates, keep this one key point in mind: when you sell, you have gain or loss to consider. You might save thousands and thousands by knowing this one simple rule.

Bad Mileage Log Kills Vehicle Deductions

Robert Walters’ auto deductions sank from $10,878 to $966 because of poor record keeping. Do the best thing you can do for yourself. Keep a good mileage log next to your appointments. This can be easy, and it will save your bacon if you get audited.

Corporate Payments of Disability Policy Cause Court Case

Take it from Richard Cotler: if you operate as a corporation, make sure to keep your personal and corporate expenses separate. Asking a court of law to separate your personal and business expenses is an expensive and time-consuming task. And you absolutely should keep the personal expenses clearly identified or, better yet, not on the corporate books at all.

Meal Replacements Are Not Deductible as Medical Expenses

Meal replacements, diet foods, and dietary supplements are substitutes for the food individuals normally consume, making them nondeductible personal expenses.

Defined Destruction of Home Produces Sale for Exclusion Purposes

At what point is a home destroyed so that it is eligible for the “involuntary conversion rules and the $250,000 ($500,000) exclusion of capital gains rules? In this chief counsel advice, the IRS gives some clarity.

105 Deduction for Inversion Table

An inversion table lets someone hang upside-down by the ankles to alleviate back pain. According to tax law, it can be deducted as a medical expense.

Deducting Golf Lessons

Golf lessons, in this taxpayer’s case, can be deducted as a business expense. The golf lessons improve the business skill he needs in his prospecting.

Bad Year Deductions

One spouse’s business losses can be written off against the other spouse’s income. Think like this: In a loss year, the business spouse provides tax shelter.

 

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