Overview:
The objective of this course is to offer a general review of taxes for small businesses. The business use of your home is a key element of this course.
Summary of Contents:
Small Business Taxes
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Filing and Paying Business Taxes
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Accounting Periods and Methods
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Dispositions of Business Property
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General Business Credits
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Business Income
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Cost of Goods Sold
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Gross Profit
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Business Expenses
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Self-Employment Tax
Business Use of Your Home
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Qualifying for a Deduction
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Figuring the Deduction
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Deducting Expenses
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Depreciating Your Home Daycare Facility
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Sale or Exchange of Your Home
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Business Furniture and Equipment
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Recordkeeping
Sample Exam Questions:
1. Al is a self-employed accountant and he is a member of a barter club. He recently began performing accounting services in exchange for general maintenance at his home that is performed by Pete, who is another member of the club. The value of the services was never discussed ahead of time. Which of the following is NOT true?
a. Pete must include the fair market value of the accounting services in his gross receipts.
b. Al must include in gross receipts the fair market value of the maintenance services he received.
c. Members of a legitimate barter club do not have to include the costs of bartered services in gross receipts.
d. If Al and Pete had both agreed ahead of time on the value of the services, that value will be accepted as the fair market value unless the value can be shown to be otherwise.
2. Monica is employed as a Reading and English teacher at Eisenhower Middle School. She is required to teach students at the school and grade papers and tests. Eisenhower provides a small office where she can meet with parents and students, grade papers and prepare lesson plans.
Even though the school does not require her to work at home, Monica prefers to exclusively use the office she has set up in her spare bedroom at home, and does not use the office provided by the school. She also runs a small jewelry business at home, but operates it from her garage.
Monica may not claim a deduction for the business use of her home, because she doesn't meet the:
a. Exclusive use test
b. Full-time use test
c. Convenience-of-the-employer test
d. Part-year use test
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