Tax Deductions 7
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
I run my business from my home and only have one phone line. Can I deduct anything for all the business phone calls I make?
If you have only one telephone line coming into the house or apartment, you cannot deduct any part of the line charge (basic service charges) for having the phone in the house. You can deduct the cost of any long-distance or other calls you can separate out from your bill and verify as business calls. Voice messaging, call waiting, or other special services would be deductible if you can prove the business purpose.
If you have a completely separate telephone line coming into the house and use it exclusively for business, all costs including the line fee and basic monthly charges could be deducted. The second line is also advisable to make sure business calls are always answered professionally. Despite the growth of home based businesses, customers don't appreciate hearing a five-year-old pick up the phone and say. "Daddy's in the pool" or hearing spurts of rock music every time your teenage daughter pick up the extension to see if you are still on the telephone.
Can I deduct the cost of my home computer and cell phone?
Computers, computer peripheral equipment, cell phones, and other property that might be used for entertainment value as well as for business are called listed property and must comply with special rules. If you can prove the business purpose, you can deduct the business portion of their cost using one of two methods: the first-year expense method (Section 179 deduction) and depreciation. If your business is classified as a hobby by the IRS (see pages chapter 23), the Section 179 expense may not be allowable in full due to the limitations of the hobby-loss rule.
What automobile expenses can I deduct?
You can take a depreciation deduction for the use of your car in business. This may be done in one of three ways: Calculate the business mileage driven and take a deduction based on this number. For 2004, the business mileage rate is 37.5 cents a mile. Thus: for every 1,000 business miles you drive you would get a $375 deduction using this method.
Calculate the business mileage as a percentage of the personal mileage and prorate the value of the automobile at the time it was placed in service to the business usage. Then use the MACR 5 year property rules to depreciate the car. (If you bought a new car for $20,000 and used it 50 percent of the time for business, you would depreciate $10,000 of the purchase price. The other $10,000 would be a personal expense and is not depreciable. )
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |
