Question

All of the following are deductable business expenses reported in Part ii of Schedule C

Car and truck expenses

Contributions to an employees profit sharing plans

Expenses related to business use of the taxpayers home

Health insurance benefits

Answer 1

Following items are deductible as business expense.

1) Car and Truck Expense: It is 100% deductible expense, Provided the expenditre made on the car and trucks are directly relatable to the business not for personal use. if any amount has been spent on personal car, that can not be deducted as business expense and shall be disallowed.

2) Contributions to an employees profit sharing plans: It is deductible business expense, as it is directly attributable to business and is in the nature of expense for the organisation. Hence deductible, although it has certain limits, that varies from state to state. Do consider your state limits before deducting these expenses.

3) Expenses related to business use of the taxpayers home: If the home of taxpayer has been used solely for the purpose of business use, then all the expenses related to that is 100% deductible, but part of home has been used for residence purpose as well, then Only Expenses related to business use of such home is deductible. A proper bifurcation between Business use of home, and Residence purpose use of home, shall be made to find out the true value of deductible expenditure.

4) Health insurance benefits: Health insurance is a onus on employer to provide it to his employees, so it is a directly attributable expense towards business, hence it is deductible to the fullest.