SMALL BUSINESS BASICS
This type of expense must be “common and accepted” in the taxpayer’s trade or business.
What is an ordinary expense?
To be deductible, a business expense must be both ordinary and this.
What is necessary (reasonable)?
To qualify for a home office, use must be both regular and ______.
What is exclusive?
A house purchased, prepared for rental, and advertised but not yet rented is considered to be at this stage for depreciation purposes.
What is placed in service?
Barter transactions are taxable based on this value.
What is fair market value?
Self-employment tax applies when net earnings are at least this amount.
What is $400?
This formula — Beginning Inventory + Purchases - Ending Inventory — calculates what?
What is Cost of Goods Sold (COGS)?
Schedule SE requires taxpayers to pay into Social Security at 12.4%, but this part of SE tax has no income cap.
What is the Medicare portion (2.9%)?
Real property exchanged for real property in business use may qualify as this type of tax-deferred transaction under Section 1031.
What is a like-kind exchange?
A business may claim this credit to offset the cost of becoming ADA-compliant.
What is the Disabled Access Credit?
An activity like Emily baking cookies at home for fun is treated this way by the IRS, meaning expenses cannot be deducted.
What is a hobby?
Money from this type of insurance payment counts as business income, even if the business is inactive.
What are temporary disability payments?
The Employee Retention Credit applied to wages paid after March 12, 2020 and before this date.
What is January 1, 2022?
To take Section 179, the property must be tangible, used in business, and must be acquired by _______.
What is purchase?
All three of these travel scenarios — a 200-mile day trip with rest, a Chicago convention, and a Germany trade show — meet this requirement.
What is qualifying as business travel?
To be self-employed, an individual must have a motive to do this, even if they don’t actually earn a profit.
What is a profit motive?
Monthly dues to this type of organization are not deductible on Schedule C.
What is a social club?
If business use of listed property drops to 50% or below, part of the deduction may have to be added back as this.
What is depreciation recapture?
Section 197 intangibles must be amortized over this fixed number of years.
What is 15 years?
A taxpayer can no longer deduct expenses related to entertainment, amusement, or recreation; this category of expenses is now non-deductible.
What is entertainment costs?
This factor (.______) is used to reduce self-employment income before applying the tax rate.
What is 0.9235?
Meals while traveling are generally deductible at this percentage (except special groups like DOT workers).
What is 50%?
This IRS form is used to calculate the expense for business use of the home using actual expenses.
What is Form 8829?
If listed property does not exceed 50% qualified business use, the IRS requires this depreciation method.
What is straight-line (MACRS ADS) with no Section 179 allowed?
Rent received for the use of farmland is reported on which forms?
What are Form 4835 and Schedule E?