Income and Deductions for Self Employed Individuals and Partnerships

Income

• All receipt from the sale of all goods and service of your company.
• Including bartering for property or services. Also, Virtual Currency will need to be included.
• Interest and Dividends.
• Sometimes cancellation of debt.
• Gains or Losses of a sale of an asset.
• All 1099 series forms received.

 
Deductions
Generally, you are self-employed if you carry on a trade or business as a sole proprietor or an independent contractor, or you are otherwise in business for yourself (including part-time business),
A business expense must be both ordinary and necessary, in other words any expenses that is necessary to conduct your business or grow your business.
Here is a short list of deductions:

• Cost of goods is the Cost of product or raw materials, including freight
• Closing inventory at year end 
• Storage 
• Direct labor for workers who produce the product
• Capital Expenses
• Business Startup costs
• Business assets i.e.:  vehicle, machinery, Improvement (just to name a few)
• Employee Pay
• Rent Expense:  Space and Machinery etc.…
• Business Interest
• Taxes: payroll, sales tax, ad valorem on business assets, real estate, state, and local tax
• Insurance Premiums used for business purposes.  Liability, malpractice, workers’ compensation, insurance employees - Health, Insurance on assets and equipment.
• Repair and maintenance on business property
• Legal cost, cost to organizing the company, professional services, including accounting.
• Research and development​
• Vehicle expenses either by the milage rate, or actual expenses, fuel, repairs and maintenance, insurance, parking, or rent on a rental vehicle, used for business purposes.  Regardless how you chose to deduct these expenses a detailed milage log must be kept., also work with your account to determine which method is best for.  Once the method is chosen for the vehicle it must be use each year on the vehicle.
• Meals, normally 50% of deductible meals however for 2021 its 100% (unless you’re in transportation industry normally it goes up to 80%) this includes travel meal and business meetings and conventions, and a qualified reimbursement plan.
• Out of Town Travel for Business
• Advertising
• Charitable Contributions related back to the business
• Credit Card collection fees and Bank fees
• Education Expenses related to the business
• Internet related expenses
• Software and computer items
• Licenses
• Moving Machinery
• Telephone 
• Cost of maintaining an office or shop, this can include home office deduction, if the space is used exclusively for the business.
• Small Tools
• Paid out Commissions and Fees
• Office Supply Exp.
• Other office expenses
• Office Utilities
• Marketing and Promotions
• Uniforms
• Postage

 
 
If you have question about whether something is could be categorized as income or expense, please contact us at 706-677-2700.  We are here to help!
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