Taxes
Deductions, records and common questions about your return.
Business expenses that are tax-deductible
To be deductible, an expense must be ordinary and necessary. A rundown of the main deductible categories —payroll, vehicle, travel, home, insurance, depreciation— and what's off-limits.
How are miles split between business and personal use?
When a vehicle is used for both, you deduct based on your business-use percentage. The formula, what counts as a business mile, and the log you need.
How is the home office deduction calculated?
Two methods to deduct the business use of your home: the regular method (a share of actual expenses) and the simplified method ($5/sq ft, up to 300 sq ft).
Depreciation (MACRS) and the Section 179 deduction
Assets that last more than a year are recovered over time through depreciation. How MACRS works, when Section 179 lets you deduct it now, and the 50% business-use rule.
Business interest expense deduction
Interest on your business debts (commercial loans and business credit cards) is usually deductible. The requirements, how to split mixed use, and the Section 163(j) limit.
Burden of proof and record-keeping
You have to be able to substantiate what you report to the IRS. What the burden of proof means, which documents to keep, and for how long.
How do I tell an independent contractor from an employee?
The key is the right to control the work. Why the distinction matters, and the risk of misclassifying an employee as a contractor.
Can I claim my spouse as a dependent on my taxes?
No —a spouse can never be a dependent. What to do instead: the married filing statuses, the ID number rules (SSN/ITIN), and nonresident spouses.
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