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Tax Deduction Consulting: Independent Contractor Deductions Bozeman MT

The IRS uses the words necessary and ordinary to determine which expenses are allowable as a deduction against income on your tax return. Necessary and ordinary can mean just about any expense that is incurred in the conduct of your business and is common to it. It does not have to be essential even, but it can not be lavish. Read on for details.

John Shellenberger
P.O Box 4758
Bozeman, MT
Company
Company: Estate Conservation Associates
Education
Franklin & Marshall College A.B.
Stanford University M.A.
Years Experience
Years Experience: 34
Service
Supplemental Medicare Insurance,College Planning,401k Rollover From Employer,Income for Life/ Preserve Principal,Medicare Planning,Annuities,Alternative Asset Class Planning,Investment Consulting & Allocation Design,Insurance & Risk Management Planning,Retirement Income Distribution Planning,Education Funding & Financial Aid Planning,Fee-Only Comprehensive Financial Planning,Long-term Care Insurance,1031 Exchanges,Wealth Engineering,Stock Market Alternative,Wealth Management,Life Insurance,Inves

Data Provided by:
H&R Block Inside Russell Square Shopping Center
(406) 251-6020
1132 SW Higgins Ave Ste 210
Missoula, MT

Data Provided by:
H&R Block
(406) 727-3577
7353 Goddard Dr Bldg 1150
Malmstrom Afb, MT

Data Provided by:
Az & Company
(406) 556-6160
1007 E Main St
Bozeman, MT
 
Tax Advantage
(406) 522-9117
518 Professional Dr
Bozeman, MT
 
John Shellenberger
P.O Box 4758
Bozeman, MT
Company
Company: Estate Conservation Associates
Education
Franklin & Marshall College A.B.
Stanford University M.A.
Years Experience
Years Experience: 34
Service
Supplemental Medicare Insurance,College Planning,401k Rollover From Employer,Income for Life/ Preserve Principal,Medicare Planning,Annuities,Alternative Asset Class Planning,Investment Consulting & Allocation Design,Insurance & Risk Management Planning,Retirement Income Distribution Planning,Education Funding & Financial Aid Planning,Fee-Only Comprehensive Financial Planning,Long-term Care Insurance,1031 Exchanges,Wealth Engineering,Stock Market Alternative,Wealth Management,Life Insurance,Inves

Data Provided by:
Campbell and Associates,CPAs
(406) 728-9288
2505 S Russell
Missoula, MT
 
Bateson Joseph A CPA Jccs
(406) 587-1277
220 W Lamme St
Bozeman, MT
 
Bailey & Brinkman Cpa's Pllp
(406) 586-4346
612 W Beall St
Bozeman, MT
 
Fran's Tax Service Inc
(406) 585-4674
7600 Shedhorn Dr
Bozeman, MT
 
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Tax Deduction Consulting: Independent Contractor Deductions

Independent Contractor Tax Deductions

An independent contractor, rather than work for a single employer, works for many clients. Independent contractor tax deductions are the same as a small business.

The IRS uses the words necessary and ordinary to determine which expenses are allowable as a deduction against income on your tax return. Necessary and ordinary can mean just about any expense that is incurred in the conduct of your business and is common to it. It does not have to be essential even, but it can not be lavish.

Among the common tax deductions for independent contractors would be the cost of a home office. In order to claim a portion of your home expenses as a legitimate business deduction, your home must be your principle place of business. If you maintain an office at home, but normally conduct your business at another location, the home office is a luxury and not an essential part of doing your business. If you meet or service clients at your home it is possible to claim a portion of your home expense as a deduction. This is usually done by calculating the square footage of the space devoted entirely to your business and comparing it to the total square footage of the home.

Another deduction common to independent contractors is for meals and entertainment. Again there are certain rules that apply to this deduction. It is necessary that business be conducted at the meal or event in order for it to qualify. In other words, you have to at least talk about business during the course of it. An event where talking would be impossible or difficult such as a theater would not qualify. If your entertainment expense is acceptable, only 50% of it is actually deductible.

Gifts are limited to $25 per recipient per year. If the gift costs less than $4 and has your name embossed on it, it does not count as a gift. The idea of gifts having your name on them, or other information about your services, actually means your gifts could be considered as advertising or promotional expenses. This should eliminate the $25 restriction, but be cautious here because there is a fine line involved between a gift and advertising. The decision might end up depending on the auditor and the situation.

Automobile expense is another common tax deduction used by independent contractors. All mileage driven for business purposes is deductible. There are two ways this can be done. The IRS provides a standard per mile allowance each year or you can keep your actual ex...

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