J.K. Lasser's 1001 Deductions and Tax Breaks 2022, 2nd Edition

CHAPTER 14Your Business

1. Start‐Up Costs
2. Qualified Business Income Deduction
3. Equipment Purchases
4. Payment for Services
5. Supplies
6. Gifts
7. Self‐Employment Tax Deduction
8. Home Office Deduction
9. Farming‐Related Breaks
10. Other Business Deductions
11. Business Credits
12. Net Operating Losses
13. COVID‐19 Government Assistance

The United States is an entrepreneurial country—it is the American dream to own your own business, and millions already do. It has been estimated that there are over 30 million small businesses, 80% of which have no employees. During the COVID‐19 crisis, many businesses shut down and, unfortunately, some went under. But given the entrepreneurial spirit, the number of new business license applications are impressive and now a recovery is well under way.

Most expenses related to running a business are deductible, but timing issues and limitations may come into play. This chapter deals primarily with business deductions for a sole proprietor, independent contractor, or freelancer who files Schedule C (or, for farming, Schedule F). Of course, many rules discussed in this chapter apply to partnerships, limited liability companies (LLCs), and corporations.

This chapter explains the tax rules for various business‐related deductions and other tax breaks. These rules apply whether your business is full time or part time (e.g., you do freelance work in the “gig” economy). If your activity isn't a business but rather a hobby (because you lack a profit motive), then in 2018 through 2025 you ...