BARBARA WELTMAN is an attorney and a nationally recognized expert in taxation for small businesses, as well as the author of many top-selling books on taxes and finance, including J.K. Lasser’s 1001 Deductions & Tax Breaks. She is also the publisher of Idea of the Day^® and Big Ideas for Small Business^®, a contributor to SBA.gov, and quoted regularly in major publications (including the New York Times, the Wall Street Journal, and Consumer Reports). Visit her at www.BigIdeasForSmallBusiness.com.

Preface vii

Introduction xi

Part 1 Organization 1

1. Business Organization 3

2. Tax Year and Accounting Methods 44

3. Recordkeeping for Business Income and Deductions 62

Part 2 Business Income and Losses 75

4. Income or Loss from Business Operations 77

5. Capital Gains and Losses 116

6. Gains and Losses from Sales of Business Property 139

Part 3 Business Deductions and Credits 155

7. Employee Compensation: Salary, Wages, and Employee Benefits 157

8. Travel, Meals, and Gift Expenses 205

9. Car and Truck Expenses 232

10. Repairs, Maintenance, and Energy Improvements 260

11. Bad Debts 280

12. Rents 294

13. Taxes and Interest 306

14. First-Year Expensing, Depreciation, Amortization, and Depletion 325

15. Advertising Expenses 367

16. Retirement Plans 375

17. Casualty and Theft Losses 423

18. Home Office Deductions 440

19. Medical Coverage 462

20. Deductions and Tax Credits for Farmers 487

21. Qualified Business Income Deduction 500

22. Miscellaneous Business Deductions 515

23. Roundup of Tax Credits 559

Part 4 Tax Planning for Your Small Business 577

24. Income and Deduction Strategies 579

25. Distributions from Your Business 597

26. Tax Strategies for Opening or Closing a Business 602

27. Tax Strategies for a Sideline Business 617

28. Tax Strategies for Multiple Businesses 622

29. Alternative Minimum Tax 629

30. Other Taxes 635

31. Filing Tax Returns, Paying Taxes, and Making Refund Claims 657

32. Retirement and Succession Planning 675

33. Working with CPAs and Other Tax Professionals 684

34. Handling Audits with the IRS 689

Appendix A. Information Returns 695

Appendix B. Tax Penalties 704

Appendix C. Checklist of Tax-Related Corporate Resolutions 711

Appendix D. List of Dollar Limits and Amounts Adjusted for Inflation 714

Index 719

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