IRS Form 1040 Schedule C and then some

[pianoguru at cox.net]

---- Terence Miller <innuuuu at yahoo.com> wrote: 

>   It pains me to have to go to 'a tax professional' just to get an answer  >to one question. My questions pop up at odd times, and not >necessarily  when I'm talking to a tax professional. 

While most of us do not feel adequately prepared to address tax questions, it is true that we all need to be more involved in tax issues throughout the year, and not just plop a shoe-box full of receipts on that "tax professional's" desk at tax time.

>   The type of expense determines where on Schedule C it will show up, >so  there is no one line on which to place "the MRC Convention" total  >expenses, they have to be broken down.

Just because the registration fee is paid to PTG does not make it a "dues" expense.  It is more on the order of "continuing professional education."  Although you can name your accounts what every you like, it is useful to make them parallel the categories that Schedule C lists.  There are a number of items that just have to fall in the "Other" category.

>   "Deductible meals and entertainment", line 24b can get tricky and  ....  >but if you're buying food, drinks, or entertainment for others, you  have to >remember who was in the party, and you have to have a  (recorded) >business reason for  it.               

I have to put in a disclaimer on this point.  If I remember correctly, I think you can claim 100% for meals, if you save every single receipt.  If it involves entertainment, only 50%.  There is also a third option.  You can use the GSA Per Diem rate (at 50%), for the city you are visiting on your trip.  For me, the per diem rate is easier, and I probably come out ahead, compared to my frugal spending for meals on the road.  The GSA Per Deim tables are at this link:

http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=17943&contentType=GSA_BASIC

>   computer software purchase
>   cell-phone or pocket pc purchase

Depending on the price, some such items can be expensed in the year of purchase.  Other items have to be depreciated over a few years.  You also have to be careful about identifying business and personal usage of such items.

Frank Emerson