J.K. Lasser's 1001 Deductions and Tax Breaks 2013: Your Complete Guide to Everything Deductible

CHAPTER 15

Your Business

Alert

At the time this book was printed, Congress had not extended numerous breaks for 2012 that had expired at the end of 2011. Check the online supplement in February 2013 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2012 returns.

The United States is an entrepreneurial country—it is the American dream to own your own business, and millions already do. It has been estimated that there are now more than 22 million small businesses. Most expenses related to running a business are deductible, but timing issues and limitations may come into play. The tax rules for your business apply whether you operate a full-time or a sideline business. This chapter deals primarily with business deductions for a sole proprietor who files Schedule C (or, for farming, Schedule F). Of course, many rules discussed in this chapter apply to partnerships, limited liability companies, and corporations.

This chapter explains:

• Start-up costs
• Equipment purchases
• Payment for services
• Supplies
• Gifts
• Hobby losses
• Self-employment tax deduction
• Home office deduction
• Farming-related breaks
• Domestic production activities deduction
• Other business deductions
• Business credits
• Net operating losses

Retirement plans for self-employed individuals are discussed in Chapter 5.

For more information, see IRS Publication 15, Circular E, Employer's Tax Guide; IRS Publication 225, Farmer's Tax Guide; IRS Publication 334, Tax Guide for Small Business; IRS Publication ...