 Year-end Planning
So
you are thinking of doing your own return or get one for free from
H&R or one of those; consider this:
Information
you should gather about certain deductions and losses needed to
prepare your individual tax return Form 1040 for 2011. We will just
consider business use of auto and office-at-home deductions to keep
it simple.
You
should let your tax return preparer know whether the deduction or
loss was:
Use
of (owned, leased or rental) autos
in business
(as self employed or as employee).
Obtain
the following for each car used for any non-personal purposes:
2011
business mileage, broken down into pre-July 1 and post-June 30
mileage;
Average
daily round trip commuting miles;
Total
2011 commuting miles, broken down into pre-July 1 and post-June
30 mileage;
Parking
and tolls for business;
Car-use
reimbursements received from your employer and whether they
were included on W-2 Form;
If
your employer provided you with a vehicle, is personal use
during off-duty hours permitted?
For
each category at (a), break down the amounts between
self-employment, investment activity, rental activity, etc. With
regard to self-employment and rental activities, break down the
amounts between various businesses and rental properties, if
there are more than one of these.
For
each non-personal use car, provide the following (except where
otherwise indicated, these amounts are totals for the year,
without regard to whether they are for business, commuting, etc,
usage): (i) Gasoline, oil, lubrication; (ii) Repairs and
maintenance; (iii) Tires, supplies, etc.; (iv) Insurance; (v)
Car washes; (vi) Tags and licenses; (vii) Other operating costs
(identify); (viii) Month and year car first used for business;
(ix) Total mileage during the year, broken down into pre-July 1
and post-June 30 mileage; (x) Regarding purchased cars: (A)
Whether the car was used for non-commuting business purposes
last year; (B) If (A) doesn't apply, and car was purchased in
2011 without a trade-in—purchase price, including sales tax,
and date car was first used for business purposes; (C) If (A)
doesn't apply, the car was purchased before 2011, but 2011 is
the first year it was used for any non-commuting business
purpose—date car was first used for business purposes and its
estimated market value on that day; (xi) For leased or rented
cars: (A) car costs; (B) If rented for more than 30 consecutive
days—car's fair market value at beginning of lease period.
Office-at-home
expenses
of employees and self-employed persons. Obtain the following
information for each activity for which you have an office-at-home:
For
which employer(s) or self-employment(s) did you use this office?
(If the same physical area is used as an office for more than
one job or self-employment, show percentage of time it was used
for each.)
Was
the area used exclusively on a regular basis as his principal
place of business for this particular business or to conduct
administrative or management activities for this business?
Was
it used exclusively on a regular basis for meeting and
conducting business with customers, clients, etc.?
Was
it a separate structure not attached to your dwelling unit that
was used exclusively on a regular basis in your business?
Was
it both (i) used on a regular basis to store inventory or
product samples held for use in your trade or business of
selling wholesale or retail products and (ii) the sole fixed
location of your business?
Was
it used on a regular basis in the business of providing day
care?
If
the office-at-home is for doing work as an employee (as opposed
to self-employment) and you didn't answer “Yes” to either
(e) or (f) above: Was your office-at-home used for the
convenience of your employer?
Square
footage in home used for business.
Total
square footage in home.
Total
amount (not business portion) spent on home in 2011 for: (i)
Rent (if home is rented); (ii) Electricity; (iii) Fuel (gas,
oil); (iv) Water and sewer; (v) Homeowner's, mortgage and/or
renter's insurance; (vi) Repairs; (vii) Garbage; (viii)
Maintenance (e.g., lawn care, snow removal); (ix) Condo, co-op
fees; (x) Telephone other than standard monthly charge for first
line into house; (xi) Other.
Repairs
and maintenance done strictly on office-at-home (i.e., not on
the rest of house).
Description
and dollar amount of any improvements made to house in 2011.
If
you rent your home and made any 2011 leasehold improvements,
when does your lease terminate?
If
you own your home and you didn't take an office-at-home
deduction for this house before current year—(A) a copy of the
settlement sheet for the purchase of the house; (B) details of
any purchase costs that don't appear on settlement sheet; and
(C) a description and dollar amounts of any major improvements
made.
Consider
whether you have enough information to deal with any
office-at-home deduction carry-forward to 2011. If not, get that
information.
And
don’t forget … this is just for considering two deductions –
business use of auto and office in home deduction. Still thinking of
doing your own return and what you get for free? Good Luck.
Have Questions? E-mail us. We would like to assist you close the year, and include these strategies.
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