By Hoff E.
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Alarms Alarm systems, both the purchase costs and any service fees, are part of the Home Office deduction. Alarm system costs for the entire home are prorated, business versus personal, using the same percentage as the home office. An alarm system just for the office is fully deductible. If you take the flat rate (“safe harbor”) Home Office deduction, alarm systems expenses are included in the flat rate. See Home Office. The problem is that my office is continually oozing out into the rest of the house.
Rossotti, Former IRS Commissioner Accident Insurance Accident insurance comes under the same rules as Health Insurance. See Health Insurance. ”) Advances Advances paid to contractors, professionals, vendors, etc. are deductible. If the advance is a prepayment for work not yet done or goods not yet delivered, if it is a substantial amount of money, and if the advance applies to goods or services to be received next year, the deduction may have to be postponed to next year. See Prepayments. If an advance is later refunded to you, and if you’ve already taken a deduction for it, you must reduce your current expenses or increase your gross income by the amount of the refund.
Every year, the IRS selects a small percentage of business tax returns to examine, looking to prove that the returns are accurate, that income is honestly stated, that deductions are legal. The IRS agents accomplish this task by talking to you or your accountant, by looking at your business records, and by examining your bank statements and business receipts. Some audits are extensive; some are narrowly focused. Some audits will cover your entire business operation for the year, some audits may question only one or a few deductions.