I had never heard of Gary W. Carter and had never read any of his books until now – and I have to say I’m really glad that I did.
Anyone who has a home-based business or is contemplating starting one needs this book on their reference shelf. If you’re like most home-based business owners, you have had numerous questions about when and how you can take tax deductions for your home office, supplies and equipment. You’ve probably wondered what paperwork had to be kept, what information it needed to show and how long you have to keep it as well, right? On top of those questions, there are the formidable IRS forms that need to be filled out properly in order to qualify for the deductions and avoid being audited. If this is you, get this book. You will not be disappointed.
Gary W. Carter, the book’s author, has over 20 years of tax experience. He has worked as a revenue auditor, tax practitioner, and seminar leader on tax issues as they pertain to home-based businesses. In this book, he shares his expertise brilliantly with easy to understand, step by step explanations, examples and instructions.
Carter’s combination of historical tax facts, court cases that have set precedence, and changes that will take affect in the coming years serve to give you a much better understanding of the entire system and your options within that system. His layman explanations of tax audits, accounting systems, record keeping, and “business” as it is defined by the IRS give you a wealth of information to belay your tax fears, and empower you with the knowledge you need to get the most out of tax time.
The very first chapter in the book covers IRS audits. It tells you how audits are done, what to expect and what rights you have. I was surprised to find the process is actually simple, direct and fairly non-threatening. From chapter two and on, Carter delves deeply into the information of the most importance to home-business owners. Topics include the legal definition of a business for tax purposes, allowable deductions and how to record and calculate them, business entity formations and the pros, cons and red tape associated with each, and more.
Chapter three is devoted to the legal entity structure of your business. It goes into more detail than I have yet to find anywhere else – and it uses language understandable by even the general public. If you’ve been reading advice that strongly suggests forming a corporation for legal and tax reasons, and struggling over whether the benefits of this move will outweigh the red tape that comes with it, you will love this chapter.
Now in all honesty, reading chapter three the first time through was slightly overwhelming due to the sheer amount of information available. I admit I skipped or glazed over a few parts because I couldn’t get my head around them, however I learned so much and answered so many of my own questions that it was well worth it. If you are overwhelmed as well, sit it on your reference shelf and refer back to key areas as you need to – the information will be immensely helpful whether it is your first or tenth time reading it.
The book continues in this massive information manner throughout. Additional chapters tackle accounting methods (cash, accrual or hybrid), explaining how each works, what the IRS rules are concerning accounting methods and which may be the best for you.
Allowable deductions are also covered in detail. One chapter is completely devoted to Transportation deductions and another explains the most common other business deductions such as computers, books, magazines, meals, insurance and retirement plans.
One chapter explains how the sale of your home plays into your home office tax reports, another details the payment of state, local, self employment and social security taxes, and another even tells you which records you should keep and for how long.
Throughout the book, explanations are given as to which IRS forms need to be filled out for which purposes. Carter even devotes one entire chapter to explaining Form 8829 (Expenses for the business use of your home) line by line. At the end of the book he also provides a comprehensive example of a married couple: What their income was and from where, how they reported their income and deductions and so on. Included with the example are all forms, filled in, that this couple submitted to the IRS for that year.
Every single chapter in this book includes a Notes section at the end. The notes’ section is an annotated reference list that tells you where to find government laws and codes, free publications, court cases cited in the book and more. This information alone is a goldmine of reference material. In addition, there are breakout boxes speckled throughout the book to provide working examples of major points being made.
In summary, this book provides an extremely detailed look at the legal and monetary side of running a business from your home. It provides a wealth of information on its own, and expands on that to provide comprehensive reference materials for anyone that wants or needs them.
Overall Rating: 5 Stars (out of 5)
Pros: You don’t have to have a PhD to understand it
Cons: Some of the information can be overwhelming, especially when references to various IRS form numbers are given. Considering the complexity of the topic however, the author did an excellent job.
Office Shelf: Reference
Availablility: In Stores Now – Check Amazon Price
About the Author
Kathy Burns is a highly respected, nationally published freelance writer.
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