Income Tax, Fundamentals And Calculations: employee expenses Flashcards
Are self-employed, taxpayer job related expenses are deductions for and reported where?
Deductions for AGI reported on schedule C
Taxpayers may deduct expenses, attributable to a home office used in a business if the home office qualifies under one or more of the following test
Principal place of business must be used exclusively and regularly for administration or management activities. No other fix location where these activities are performed to a substantial extent.
Must be used exclusively and regularly as a place of business to meet clients or patients in the normal course of the trade or business
Under deduction and limits for home office what are the rules using the regular method?
Allocation of total household expenses is required
Expenses, that would normally be allowed must first be deducted
Self-employed individuals deduction is for AGI
Disallow expenses can be carried for
Total on these expenses cannot exceed the gross income from the business and cannot create a loss
What is the simplified option for home Office expense?
Standard amount of $5 dollars per square foot of the home use for the business expense maximum 300 ft.² maximum home office expense deduction of $1500 for the tax year
Heather allowable home related itemized deductions or claimed in full on schedule A
No depreciation expense deducted for the home office for the years to simplified option is used
How are reimbursements of employee expenses treated by the taxpayer?
Excluded from employees, gross income expenses are not deductible from gross income
