My accountant and I are at odds about this issue. The story is that my wife and I, who run a general partnership cleaning business, purchased a minivan in June of ’09 exclusively for business use. The purchase price was 00 and we paid for it outright. Then in December, we sold the van for a large loss (we only got 00 for it) due to it having serious mechanical issues. So basically we took a loss of 00.

My accountant claims you can either deduct a.) expenses of the vehicle such as gas, maintenance, and depreciation or b.) mileage – but you can’t deduct both. He also says that if I deduct the mileage, I can’t deduct any of the actual purchase price of the vehicle. And if I go the expense route, I can only deduct depreciation (which would probably be around 20% of the vehicle cost). My take on it, (and what I’ve heard from another accountant who I wanted to go with but was booked already for this tax season), is that you can deduct the purchase price of the vehicle, and report the 00 that we sold it for as income, using the section 179 deduction. Then AT THAT POINT you either choose to go the expenses route (minus any depreciation of course) OR the mileage route when making deductions for while the vehicle was in service.

I know what he’s getting at with the expenses vs. mileage route as that’s usually true, but I think he’s wrong in his thinking in our case and I’m trying to get either confirmation of his stance or mine. I posted on another board also but people weren’t sure. If anyone can give me an answer either way and knows for sure what they’re talking about, your input is greatly appreciated on this!!

Dr. Mcfee formed a medical corporation that had the following business expenses for the year:

Wages-,500
Utilities-,840
Interest-,000
Property taxes-49.00
Depreciation-,916.50
Other deductions- 00
Together they all equal out to be ,505.50

The corporations gross income for the year was 4,850. What is the federal corporate income tax for the year?

A. ,249.50
B. ,336.13
C. ,137.25
D. Not given.

I’m trying to understand the rationale behind WHY the use AGI instead of business income. And more specifically, I know they will add back depreciation which makes sense – but would they also add back things like "student loan interest deduction"? What about "1/2 of self employment tax deduction"?

When a bank is deciding whether or not to give you a loan, the use of a Debt to Income ratio already takes into account your monthly student loan payment, so it seems like "double dipping" that they can use it to knock down your income a few notches lower, and then turn around and also have that same category take away from your monthly spending power.

And don’t get me wrong, I completely – 100% – agree with your debt to income ratio being affected since a student loan is a monthly expense, but it’s hard for me to understand why they would also reduce your income for something that has nothing to do with the bottom line of your business income earning power? It seems to me like it would be fair to do one or the other, but not taking away from both sides.

If the gov’t wants to give you a deduction for student loan interest, or for 1/2 of self employment tax, and that reduces the amount you pay them then great. But I’m not seeing how the gov’t giving you a tax credit really has much to do with your ability to pay back the bank mortgage. You’ll pay the bank back if your business is profitable, how much money you are bringing on an income statement (Income – expenses = net profit).

Can anyone help me to understand this?
"AGI what you pay bills with"

Actually, I’m failing to see that connection. My student loan interest is already accounted for in the debt to income ratio the banks use. Right? So why are they then going and reducing my income as well?

My old Tax man has a program that does my taxs. I’m a small sole proprietor contracting business. Can I purchase a consumer (or standard) version of a program that will generate my tax returns complete with deduction, amortization schedules, depreciation ect? I would need something that is helpful to someone that is willing to learn. iknow- I’m gonna get all these answers that tell me not to do it myself- thats fine- humor me- is ther esoftware available that will perform this for me?

My husband and I are just starting a cattle business. We are buying calves to sell after we feed them on our land. So basically we buy the calf, feed it, and turn around and sell it; hoping to make a profit. (most likely will make a profit) We don’t have very many expenses with this business. Our basic expenses are the seed for planting the land 0, lawn mower fuel for the year- 0?, occasional food pellets- 0. We own the land the cattle is own, and have a metal shop that we use as a barn. Are there any other deductions I can show, like my vehicle and insurance for my vehicle (we use it to pick up feed etc), and what about depreciation for the lawnmower, shop, and vehicle? I was just wondering if some one could give me advice on if it would be "worth it" to claim our for-profit business on our tax return for next year, and what things can I deduct.

Business tax question? I am stumped!!!!?
I ran a business in 2008. It was a plumbing business. I started this business in August 2006. Over the years I have deducted certain assets. Some I depreciated and some I took the 179 deduction. Now where we are not doing business as of now.My husband took a full time job. What happens when I do my taxes this year? Can I still deduct the depreciation where the business ran for 9 months? Also I purchased some assets that I put in at the beginning of the year before I knew the business was going under. Can I deduct those Items for the 9 months I used them? Do I have to dispose of these assets? What about next year where there will be no income. Thanks Janine
By the way I am using turbo tax.

I purchased a truck for my business and paid 1400.00 in sales tax. I use the truck 100% for business. What I was wondering is can I take the sales tax off of my income tax or is it included in the depreciation. Also I didnt keep a record of mileage for the year. Does that make any differance.

What is the value of a used printer? Key word is used? Is it the value of what you would find on eBay or Amazon….or a deprecation of the original purchase cost…but the product changed hands.

This printer costed supposedly 0 when it was first purchased – 2004. (2004 is considered old!) I now can get it new one Amazon for 0 but I can buy it used on eBay for . So how much would a tax receipt be worth? 0 less 10% per year for business depreciation, 0 for a new one but it isn’t new, or for the fair market value for a used one on eBay?

Anyone have any ideas?
Well – problem is I am being told it is worth if I donate it..and I feel it is worth 9 because of the depreciation. I am donating this to a nonprofit organization. They can find it on eBay for used and 0 new on Amazon. So, how much should I expect a receipt for? Does that make sense?
But they are not buy it…it would be an in kind donation. They don’t feel it is as worth as much as I do since they can find a new one on Amazon for 0 and on eBay for . In 2004, I paid 0 for it. Yes, it is used. So, what is the right amount. I don’t want to write the wrong number off.

1. 5% National Sales Tax on ALL goods and services…
2. Eliminating our 10% tax bracket…
3. Exemption for adults up to the POVERTY LINE…
4. 1/2 POVERTY LINE exemption for children…
5. consolidating our tax brackets into three… first, from poverty line to MEDIAN household income would be our new 15% bracket… from MEDIAN income to our current 30% threshold would be our new 25% bracket, and from (THAT NUMBER) and over would be our 35% bracket…
6. Corporate taxes would follow the same as income tax…
7. Businesses would get an immediate write-off on all capital investment. NO DEPRECIATION!
8. The only deductions allowed in our tax code, because of the generous exemption, would be mortgagte interest, retirement savings, and charitable contributions…

I’ve been a Realtor for the past five years. Since starting, I’ve deducted as a business expense: my business-related mileage/depreciation of my car, business related cell phone useage (from my yearly bill totals), MLS/Board dues (what I was permitted to) my postage costs, costs for business cards and any other neccesary stationary for work. I’ve heard from other agents that there is much more that I can claim as deductions…but there are conflictions between these agents as to which expenses are "allowed" and which are not. Would anyone know anything about this?