1040X Amendment, Schedule C Deductions

When filing a 1040X Amendment, what kind of deductions can you take on a Schedule C?

Generally anything you paid for the sole purpose of making money. Also, if you still are in the positive income range on Sch C after taking all the deductions you can, look into office in home if it applies to you. Think about if vehicle deductions work for your situation as well since these can add up fast. (A note, Office in home, and vehicles have very specific rules, so use these exactly right cause they are hot button issues for the IRS right now).

 

A short list of other things to consider with 1040X Amendment

  • accounting and bookkeeping
  • advertising
  • Answering Services
  • Bank Charges
  • Commissions
  • Contract Labor (be careful of 1099-misc requirements)
  • Delivery and Freight (outgoing only)
  • Dues and subscriptions (relevant only, a stock broker does not need Sports Illustrated)
  • Insurance (not health insurance, if you are self employed, health insurance for self employed is an adjustment on the 1040)
  • Interest paid
  • Janitorial
  • Legal and professional services
  • Office expenses (often abused. This is for paper and ink and pens and the like)
  • Outside Services (Buying a service from a company, like credit reports from credit reporting companies)
  • Rent paid
  • Repairs
  • Security
  • Cleaning supplies
  • Taxes paid during the year
  • Tools
  • Uniforms (Only exclusively work use, a lawyer can’t deduct a tie)
  • Licenses and License requirements (like union dues or continuing education)

 

Depreciation or Expenses

Things like computers, printers, furniture, and other assets should be depreciated and not expensed. (not sure if it’s an asset? Is it meant to be used for more than a year and costs more than $100, it’s probably an asset)

Several additional notes which might be relevant for small business owners filing a 1040X Amendment are listed below. Taxpayers should take into consideration several of these deductions when filing a Schedule C on their small business tax return.

1040X Amendment, Schedule C Deductions

A purchased vehicle should be capitalized and depreciated based on the portion (percentage) you use for your business. The same treatment applies to leases as their is a lease inclusion, that with a Schedule C, would be subject to the same apportionment based on your business use percentage. This percentage is found by taking business miles divided by the total miles of the vehicle.┬áMeals and Entertainment are 50% deductible. Be sure that they are actually business meals. Taking a client out for golfing and drinks would be meals and entertainment subject to 50%. Grabbing Starbucks every morning before work wouldn’t fly.