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12 of 14 people found the following review helpful:
5.0 out of 5 stars
Great for new professional starting out., September 25, 2007
This is a great book for a new professional starting their own office. It steps you through all the different types of business structures for professionals and the tax treat of each, in minute detail. Really great book, we're using it to start a law office. The same author has written another great book, Deduct it! Lower your Small Business Taxes. While it is also a great book, I would suggest that you NOT purchase both books. A lot of large sections of text are identical between the two books. For professionals, I'd just go with this one and skip Deduct It!
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6 of 6 people found the following review helpful:
5.0 out of 5 stars
Invaluable, Complete Reference for Professionals Who Want to Maximize Their Tax Deductions, June 25, 2010
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This is not a tax preparation guide per se, but a book that provides information about tax deductions for professionals, how to avoid common deduction mistakes, and year-round planning and record-keeping to ensure eligibility for professional tax deductions.
The author points out, early on, that professionals are business owners, and therefore can deduct start-up expenses, operating expenses, capital expenses, and inventory costs. He then goes on to explain how a professional's choice of business entity (sole proprietorship, partnership, corporation, limited liability company, or limited liability partnership) can affect the professional's personal liability, tax rates, tax deductions, and tax treatment. The author includes valuable advice about potentially costly problems that can arise from the business entity choice, such as being classified as a "personal services corporation", or being taxed twice (on corporate profits and personal income) as a "C corporation".
The author then discusses various types of deductible expenses, explaining in detail which expenses can--and cannot--be deducted. There are individual chapters on operating expenses, meal and entertainment expenses, car and local travel expenses, long distance travel expenses, home offices, outside offices, long-term assets, start-up expenses, medical expenses, retirement plans (IRAs, qualified retirement plans, Keogh plans, solo 401(k) plans, Roth 401(k) plans), and inventory. There is also a chapter on miscellaneous deductible items, which include advertising, bad debts, casualty losses, charitable contributions, business clothing, disabled access credits, license fees, education expenses, gifts, insurance, loan interest, business and professional services, taxes, and domestic production activities,
Particularly helpful are the chapters of advice on tax consequences of hiring employees and independent contractors (e.g., temps may be employees), and of being incorporated as a professional (e.g., professionals may encounter "unreasonable compensation" problems). Another chapter explains how the method of paying business expenses can affect a professional's taxes. The author also has included chapters on reasons for filing amended tax returns, and on record keeping and accounting. One of the most interesting chapters is "Staying Out of Trouble With the IRS", which discusses audits, provides 10 tips for avoiding an audit, and briefly explains tax shelters, scams, and schemes. Finally, there is a chapter that suggests many excellent additional sources for tax information and "help beyond this book".
Like all Nolo books, TAX DEDUCTIONS FOR PROFESSIONALS is written in clear, easy-to-understand language, even when the subject matter itself is difficult or complex. The book also has an extensive index. The fact that the book is not tied to any one tax year means that it retains its reference value (although the book is regularly updated).
This book is a great reference for a new professional who is just starting out, who is handling his or her own tax returns (or thinking about it). It is also a great reference for an established professional who would like to understand taxes better, either (1) to be able to better communicate with his or her accountant, or (2) to be sure that the accountant has not missed any important deductions or tax considerations relevant to the professional's business.
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3 of 3 people found the following review helpful:
3.0 out of 5 stars
A Lot of Information Not Applicable to All Readers, March 13, 2011
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I should first assert that I am a small business owner, and have worked with several friends to walk them through these exact types of things in order to set up their businesses. I wanted to read this book to see if this is something that I could offer that may be more helpful (this is not the type of work I do, people have just asked because they know that I have been through the setup process, and several tax seasons).
Anyways, here is what I found:
1. This product has way too much information geared towards C corporations. I think a general summary in the beginning about a C, and the inclusion of a basic statement that unless you are doing over 7 million, you will not be a C corporation, and at that point, you should hire a professional, staff accountant or controller who would know these laws. Which brings me to my second point...
2. I feel like the author fails to recognize the audience. To me, I think the audience would be someone who is in the process of creating a small business, or a new small business.
3. I think a lot was left out as far as the specifics in relationship to the small business. For example, they thoroughly covered mileage, except they didn't talk a lot about "home office" mileage, and not counting mileage from your "home office" etc. The IRS is picky about this. The other one I noticed was the home office deduction. He first lists it in his red flag section, but then later mentions that tax laws have eased up. Although this is true, there are still so many guidelines to which the author sends you to the IRS tax form, which in my mind is useless. Even the IRS can't figure out their own tax forms.
4. The last thing that really bothered me was the recommendation for being a Sole Proprietorship. This is true that most small businesses are SP, but one of my clients is a team of lawyers, and the liability for a SP is so great, I don't think I could ever recommend it. The SP has no further tax forms, but they still have to keep the same records, and for about 600.00/year you can pay an accountant to handle the S Corp returns/payroll, and save yourself what could be thousands of dollars in taxes, not even mentioning the liability a SP holds. On a side note, several years ago when I was first starting out, my accountant showed me the difference between the S Corp and SP return, and for what little amount I made at the time, it was almost a $2,000.00 savings over being a SP (after what I paid my accountant).
Overall, this is a good book. It has a lot of pertinent information. However, I found it quite wordy for so many things. It is trying to encompass tax deductions for so many different types of businesses, with different tax setups. This creates a lot of information that is touched on, but not detailed for specific types of business (ie. construction vs. attorneys).
If I were choosing a book, it would have the basic corporate types spelled out in the beginning, and then once you decide on a tax type it would have an additional book for the type of tax setup you choose, ie. s corporations vs. llc. In this book there is so much information that it really doesn't help getting into the specifics until you choose a tax type, otherwise it is just a big jumble of too much information.
I would also add that when recommending getting started, I always say that after you pick your tax type, pick a computer program (peachtree or quickbooks), and then get one of their books to figure out what deductions to take, and how to enter those deductions directly into your books. Clean, well organized books are the key to saving yourself a lot of money when having an accountant prepare your taxes, and keep you from an audit.
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