1. Is It Deductible?
A brief guide for small business owners
By
Julie L Thompson, CPA, CFE

2. As required by U.S. Treasury rules, I inform you that, unless expressly stated otherwise, any U.S.
federal tax advice contained in this presentation, including attachments, is not intended or written to
be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be
imposed by the Internal Revenue Service

3. Business Expenses
“Reasonable” – Ordinary and necessary

4. How is your bottom line?
•Huh?
•Still working on them….
•My CPA will tell me!
•I still have cash so I must be fine.
•Excellent!

5. Often missed business expenses
• Travel expenses i.e. baggage fees
• Employee meals – not always 50%
• Car expenses (See slides)
• Rent
• Retirement savings
• Startup Costs
• Home Office
• Small out of pocket costs i.e. –
books, publications, web courses
• HSA

6. Self-employed health insurance is not
a deduction.
It is taken as a credit on page 1 of
Form 1040.
However you should pay the insurance from your business account.

7. Auto expenses – Standard vs Actual
Standard mileage rate
• 2015 = 57.5 cents per mile
• 2016 = 54 cents per mile
• Tolls
• Parking
Actual auto expenses
• Gas
• Oil
• Repairs
• Tires
• Insurance
• Car washes
• Registration fees
• Licenses
• Depreciation
• Tolls
• Parking

8. Home Office
Must be ONLY used for business to
qualify and as principal place
 Simple option - $5 per square foot
OR
 Regular method
 Cost of house - depreciation
 Utilities
 Repairs and maintenance
 Insurance

9. Retirement accounts
Single Employer 401K
$18,000
PLUS
25% of net income
SEP IRA
Lessor of
25% of net income OR
$53,000
SIMPLE IRA - Employees
$12,500
Employer can choose to match from 1% to 3%

10. Often missed individual
deductions
 State sales tax
 Out of pocket charity costs
 Job hunting costs
 Child care credit
 American Opportunity and Lifetime
Learning Credits
 Energy Saving Home Improvements
 Legal fees to secure alimony or
income
 IRA deduction – due April 18, 2016
 State tax paid in 2015 for 2014

11. Deadlines
Form 1040 – Monday April 18, 2016
Form 1120 – Tuesday , March 15, 2016
Form 1120S – Tuesday, March 15, 2016
Form 1065 – Monday, April 18, 2016
Extensions
Form 1040 – Monday, October 17, 2016
Form 1120 – Thursday, September 15, 2016
Form 1120S – Thursday, September 15, 2016
Form 1065 – Thursday, September 15, 2016
Estimates Due
First Quarter – Monday April 18, 2016
Second Quarter – Wednesday June 15, 2016
Third Quarter – Thursday, September 15, 2016
Fourth Quarter – Monday, January 16, 2017
IRA Contributions
IRA – Monday April 18, 2016
SEP IRA – by due date including extensions
Simple IRA – by due date including extensions

12. Questions?
Contact
Julie L Thompson, CPA, CFE
(708) 860 – 2677
Email: Bosslady@myawesomeboss.com