More on Business Expenses

I sent Christine my complimentary list of business expenses. She received it and here are her questions on business expenses. As most of you know I have a full-time accounting practice which serves wacky, wonderful indies. And so, because it's tax season, I am going to do the quick-answer mode for Christine. I EMBEDDED my response below ... June


Thank you very much.... YOU ARE WELCOME!

I plan on purchasing your book so I can look further into what I may deduct. SMART MOVE.

My main job as a Nurse Practitioner I am employed at a private practice but I also sub-contract for a physician at a local prison and I need to find some deductions for that. UNLESS YOU COMPLETELY SHUT-OFF WORK WHEN YOU ARE NOT AT THE PRISON YOU MUST HAVE SOME DEDUCTIONS. AND WHAT ABOUT TRANSPORTATION WHEN GOING FROM ONE WORK PLACE TO ANOTHER?

I have an office in my house with a computer and furniture that I do my research and continuing education in. WOW! I SEE LOTS OF DEDUCTIONS RIGHT THERE.

My husband keeps telling me that I can not deduct part of that as an expense IF THERE IS AN AREA USED EXCLUSIVELY FOR YOUR WORK THEN YOUR HUSBAND IS WRONG. AND WHERE DID YOU SAY YOUR HUSBAND STUDIED ACCOUNTING? I beg to differ with him, my accountant in the past has not been too much on some deductions but with the sub-contractor part I need to find some deductions. I

also have cleaning ladies that clean my house but also they clean my office how do I deduct that as part of an expense? I guess what I am asking is how I deduct part of the utilities, house payment, insurance or what percentage I guess would be a better question. YOU MAY FIND THE ANSWER IN THESE POSTS home office or studio (25). IF NOT THEN HOME OFFICE DEDUCTION IS COMPLETELY EXPLAINED IN MY BOOK.

Thank you I found that your website was very insightful.

Christine
Elida, OH

Cash Basis

June --

I am an RN case manager.

In 2008, I received one check that went on a 1099, however, I became an employee of the same company on Jan 1.

Am I right in assuming that I can't deduct any expenses for that check since it was earned in Dec, 2007?

Mary
Knoxville, TN


Dear Mary,

I think I understand your question but am not sure so I'll just give you some info that may help you out.

You are a cash basis taxpayer. That means that you deduct the expense in the year incurred. You claim the income in the year received. If you had self-employed expenses in 2007, that's when you should have deducted them. If you were paid in 2008, that's when you claim the income.

There are ways to change your accounting method from cash basis to accrual. In your situation it doesn't seem worth it.

-- June