Tax Ch 4 (2010) - IncomeTaxChapter4 SelfEmployed&...

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    Income Tax Chapter 4 Employee Expenses
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    Self-employed – deductions taken on  Schedule C ( For  AGI) Employee – deductions taken on  Schedule A ( From  AGI) Self-Study Problem 4.1  – page 4-3
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    Employee Expenses Reimbursed by employer Accountable plan (receipts required) Or per diem No tax consequence Not reimbursed Miscellaneous itemized deduction (less 2% of  AGI)
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    Travel vs. Transportation Travel – away from business home  “overnight” – rest required Transportation – getting from one  business location to another
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    Travel Expenses Primarily business Transportation to and from 100% deductible (within  U.S.) deductible Business meals – 50% deductible Primarily personal Transportation to and from not deductible Actual business expenses deductible same as if at  home Self-Study Problem 4.2  page 4-5
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    Documentation  Receipts for each expenditure:  air fare,  meals, hotel, etc. Destination  Business purpose
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    Per Diem for 2009 Amount allowed per day  No receipts needed Regular rates – by area or city base rate $109 – higher in some cities High-Low Method – all locations either $256 or  $158 Actual cost for hotel Only method allowed for self-employed
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    Transportation Bus, train, BART, taxi, automobile Commuting not deductible Use of own car after arriving at job site Transportation between two jobs  deductible Additional cost of hauling tools deductible
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    Transportation, continued Between home and work deductible: Work location outside normal work and home  metropolitan area Temporary work location Taxpayer’s residence is principal place of  business 
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  Use of Own Vehicle Must log mileage Who, when, where, miles, business purpose Actual expenses Gas, oil, repairs, depreciation, insurance prorated by  mileage
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This note was uploaded on 02/02/2010 for the course ACCT 1B taught by Professor Bobd during the Spring '09 term at Las Positas College.

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Tax Ch 4 (2010) - IncomeTaxChapter4 SelfEmployed&...

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