1. ADVERTISING –Business cards, flyers, display and classified ads in newspapers, radios & TV ads, etc.

2. BANK CHARGES -Service fees and checking costs, including check imprinting, over draft protection, and any costs and penalties from late charges and insufficient funds on Business Account

3. DUES & PUBLICATIONS -Newspaper and magazine subscriptions and purchases from newsstands, fees of business service clubs, professional associations, and distributorship fees.

4. FREIGHT -Handling charges, cost of product shipments sent and received, including gifts and special carrier delivery such as UPS, Parcel Post, Federal Express. (If not included in cost of goods sold.)

5. INSURANCE (non home) -Professional liability insurance, computer insurance, insurance on inventory. Health Insurance.

5a. INSURANCE -Business portion of homeowner's insurance for casualty, fire, theft, property damage, and liability. Also, Renter's Insurance. (Subject to gross income limitation)

6. INTEREST -Business portion of home mortgage interest, interest on business loans, installment payments of business furniture, equipment and credit card interest charges. (Home mortgage interest subject to gross income limitation)

7. LAUNDRY & DRY CLEANING -Cost of preparing Business portion of home and furnishings for meetings, including draperies, carpets, and cleaning products.

8. LEGAL AND PROFESSIONAL SERVICES -Payment for business services of all kinds including attorneys, accountants, business managers, and tax service.

9. OFFICE SUPPLIES & POSTAGE -Stationery, pencils, pens, paper clips, envelopes,  file  folders, erasers, product order forms, bookkeeping and  art supplies. Small equipment items such as pocket calculators, staplers, paper punches, diaries, ledgers, tablets. Stamps for all correspondence, newsletters, IRS audits, business Christmas cards, bills, and all costs of certified, registered and insured mail.

10. RENT (non home) -Meeting rooms, outside-the-home office space, storage, and all lease costs.

11. RENT -Business portion of home rent. (Subject to gross income limitations)

12. REPAIRS –Corrective maintenance to business property of equipment. Not home maintenance/repair.

13. SUPPLIES -Groceries for home meetings or entertainment, refreshments, coffeemaker, cups, napkins, toilet paper, linen, interior decorating items, special lights.

14. TAXES & LICENSES -Business license, excise resale tax. This does not include taxes in products purchased or real estate taxes.

15. TRAVEL -Traveling costs such as plane, taxi and bus fare.  Rental cars, meals (50%) and lodging, tour guide fees and special arrangements while away from home. (Business portion only)

16. MEALS &ENTERTAINMENT –Business meals (50%). Extra activities such as catering, special refreshments for birthday or anniversary parties, ballgames, sporting events, plays, movies, etc., used in conjunction with business clients. (Keep all receipts. Document with 8 elements of substantiation.)

17. UTILITIES -Business portion of natural gas and electricity, heating oil, water, and sanitation. (Subject to gross income limitation).

18. TELEPHONE – All business telephone costs, including service charges, message units, long-distance calls and pay phones. (Log in Daily Diary) Answering  service. If separate telephone is installed for business then 100%, otherwise on second phone line only.

19. WAGES -Payments for services/labor performed. (Could be your child for doing warehouse or office work.) Keep a time card and pay by check.

20. CAR & TRUCK EXPENSE - Expense for business purposes: lease, insurance, tax, license, maintenance, gas, oil, wash, wax, repairs, replacements, parking and toll fees. ( To claim, keep all receipts and keep track of mileage, daily.)

21. ANSWERING SERVICE - Payment for taking phone messages. Outside service or someone in home. Pay by check.

22. CONTINUING EDUCATION AND MATERIALS - (School of higher learning, must be accredited or list under training.) All business related courses.

23. CONVENTIONS AND SEMINARS - Costs of attending or participating in meetings and rallies.

24. DELIVERY - Any costs incurred delivering product or service, including UPS and other courier service.

25. DEMONSTRATIONS & COMPARISONS - Products used for demonstration purposes. Portion of groceries used for business meetings. Self-use of products (first time only)

26. GIFTS - Items given to any prospect, customer or associate, up to $25.00 annually per person. Documentation necessary. If over $25., list under incentive or awards.

27. INCENTIVES & AWARDS – If over $600. you’ll need a Form 1099. Pins, plaques, applicable product discounts, rewards, costs of contests and prizes - anything expended to generate sales, including raffles, drawings and door prizes.

28. MARKET DEVELOPMENT - Meals and entertainment outside the home. Closely  related to sales promotion. (Document with 8 Elements of Substantiation.)

29. MAINTENANCE - Upkeep of business property (other than vehicles), such as your office, meeting rooms, etc.

30. OFFICE DECOR - Paintings, pictures, flowers, etc. (Furniture is listed separately.)

31 PEST CONTROL - Cost of professional service or products purchased to get rid of pests, such as "Raid", rat traps, etc.

32. PRESENTATION/PROPS - All materials used in presentation.  (Slide projector, cost of making slides, blackboards, easels, etc.)

33. SALES PROMOTION - Business-related meals, recreation, and entertainment incurred outside the home on behalf of clients and yourself. (Document with 8 Elements  of Substantiation.)

34. OUALITY CONTROL - Costs incurred to assure constant quality.

35. REGISTRATION FEES - All fees incurred in trade shows, licensing, distributor fees.

36. RESEARCH - Product demonstration and display items, all "Brand X" products, new products for promotion, and samples.

37. ROOM & BOARD - Includes costs incurred while traveling.

38. SECURITY - Guard dog care and feeding, alarms (smoke detectors and fire alarms), padlocks, garage door openers, guns, mace and electronic sensors (including installation and repair). Business portion only.

39. TRAINING - Costs incurred in printing materials, rental of rooms for training meetings, training tapes and supplies, etc.

40. WAREHOUSE - Storage costs away from home, such as lockers, garages, dock fees, hanger space, etc.

41. PRINTING - Reproduction of newsletters, fliers, brochures, business cards, tickets and all copier costs.

42. COMISSIONS - Bonuses paid to distributors.

43. SERVICES - Amounts paid to others to work in your business. If over $600. must issue Form 1099.

44. MAJOR EQUIPMENT PURCHASES – Itemize separately. List date of purchase and cost.

                               8 ELEMENTS of SUBSTANTIATION:

           I.   DATE?                      (Date event occurred)

           2.   TIME?                      (Time event occurred)

           3.   PLACE?            (Name of the Place that the event occurred at.)

           4.   PERSON?          (Names of people involved at event.)

           5.   BUSINESS RELATIONSHIP? (Business relationship of people involved.)

           6.   BUSINESS REASON? (Business purpose of event)

           7.   AMOUNT?                 (Cost of event)

           8.   RECEIPT?         (Keep all receipts, especially ones over $25.00)

Prepared by Barbara LaVolpa

CTEC Registered Tax Preparer