THINGS TO CONSIDER WHEN STARTING A SOLE PROPRIETORSHIP

Select a name for your business

Open a checking account under your name DBA the business name

Deposit all income into the business checking account

Write checks for as many of your business expenses as possible and save all receipts

If you pay cash for expenses, get a receipt from the seller. If hand written, be sure it has the date, the seller’s name and what you purchased

Write down your vehicle mileage when you start your business and again on December 31 of each year. You will be able to deduct a % of your total mileage without gas receipts and a % of your car loan interest

If you entertain clients, get a receipt and write the name of the person at the event as well as a short description of what business was transacted

You can give business gifts to your clients or potential clients with a value of $25 or less per client per year

You are allowed to deduct/depreciate office furnishings, equipment and supplies

You can deduct magazine subscriptions, books and membership dues that relate to your line of business

You can deduct bank service charges and check printing charges

You can deduct rent and utilities for your business and/or storage

You can deduct accountants consulting fees and attorneys fees

You can NOT make donations to charitable organizations and deduct them as a business expense unless they are advertising, ie, You pay for an ad in a school yearbook.

You can deduct floral arrangements that you use in your office as well as other decorations

You can provide coffee, etc to your clients and deduct the cost

If possible, use separate credit cards for business and personal purchases

Long distance phone calls are deductible, but in order to deduct the base rate, you must have two lines into your home.

Cellular phones and the calls are deductible

Internet provider charges are deductible.

(This list is not all inclusive. There are numerous other tax deductions available.)

DIANA PAYNE, CPA, MBA, CFE