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What records do I need to keep for business expenses?
As a self-employed taxpayer, you’re allowed to deduct expenses that are ordinary and necessary for your business. Ordinary business expenses: common and accepted in your industry Necessary expenses : helpful and appropriate for your trade or business. Example: Lumber for a carpenter Why? The expense is common and accepted…
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How to take advantage of home office expenses
Having a home office allows self-employed taxpayers to deduct a portion of the house expenses if they have a qualified home office. A qualified home office can be a room in your home, dedicated space on your houseboat, an unattached garage, or even space in a barn, but it must be regularly and exclusively used to conduct…
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How to track business meal or entertainment expenses
Meal and entertainment expenses need to have more documentation than some of the other common self-employed business expenses. You'll need to keep track of and document the following; 1) The receipts 2) What the business purpose was for eating out at a restaurant 3) Who was there at the business event 4) What business was…
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How to track a personal vehicle as a business expense
For vehicle expenses from personal use vehicles, the IRS requires you to document the actual amount of vehicle expenses (fuel, maintenance, licensing fees, car interest, lease payment, insurance, etc.) and the miles driven that are strictly related to the business in a mileage log. In the mileage log you record where each…
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Rental income (Schedule E)
Menu Path: Income > Business Income > Rental Income (Schedule E) If you have rental income from real estate such as a single family home, apartment complex, vacation home, or any other type of real estate that you own, enter your rental information on the Rental Income screen. Income from renting equipment or vehicles…
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I have a 1099-NEC with nonemployee compensation, but I don't have a business. Why do I need a Schedule C?
Nonemployee compensation on a 1099-NEC is self-employment income and usually needs to be reported on Schedule C (or Schedule F if it is farm income) even if you are just doing a little bit of work on the side and do not have an official business. The IRS considers any income reported in Box 1 of the 1099-NEC as…