Customer Reviews

Tax Deductions for Professionals

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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!

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.

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.

I consider myself a professional but I do not have my own business practice. "Tax Deductions for Professionals" is for those who run their own professional practice such as an LLC, LLP, S Corporation, etc. and want to know about the tax implications with regard to their business. It is applicable to many different professional business owners including technologists, accountants, writers, etc. This is the January 2010 edition (outlining 2009 law); and this book is revised yearly.

I selected this guide so I could understand the tax ramifications behind a professional business such as an LLC just in case I ever considered going that route.

The author really delves into tax deductions in detail. For instance, according to recent tax law, you'll learn things like:

- C corporation tax treatment is the only type that allows business owners to retain earnings in their business without paying personal income tax on these earnings. Professionals who do not practice in the field of health, law, accounting, architecture, or consulting can keep up to $250,000 in a C corporation; however, those in these fields are only allowed up to $150,000.

- There's a five-car rule that may disallow you from using a standard mileage rate when calculating mileage deductions.

- If you travel outside the US for no more than seven days and you spend some time on business-related activities, you can deduct 100% of your airfare. Whereas inside the US you must spend more than half of your time on business to deduct 100% of the airfare.

- There are different ways to calculate your home office deduction (room method vs square footage method).

- Etc., etc.

Every viable tax deduction is subject to exceptions and conditions all of which the author describes in detail in the book.

You'll also learn stuff that is not tax related but an eye-opener such you can still be personally liable even though you formed a corporation, LLC, or LLP. I thought forming an LLC limited your liability; but this is not always the case. I also learned why the government indirectly encouraged business owners to buy large SUVs and Hummers; until 2004 business owners could deduct up to $125,000 in one year for such vehicles.

In addition, you'll learn how to deduct start-up expenses, handle IRAs, the implications of hiring employees, etc., etc.

This guide is just a treasure trove of information for the professional business owner and is explained in enough detail so that almost everyone can understand it. If you are doing your own taxes or just educating yourself on the tax records you should be keeping and want to know how you can maximize your deductions, this is the book to read. However, be prepared for a lot of reading.

I've said before (Business Loans from Family & Friends: How to Ask, Make It Legal & Make It Work) that the NOLO books are "well written, easy to understand, and highly useful" and this book just continues that great streak.

The U.S. tax code is a jumble of rules and laws that is nearly impossible for ordinary folks to understand, never mind the thought of an average professional (Lawyer, Business person, etc.) wading through the mess while trying to grow their business. The Tax Deductions for Professionals book offers those folks a fair chance at making the right moves from the beginning rather than having to deal with cleaning up mistakes of ignorance they may make. I seem to recall a TV network using a slogan that went something like "The More You Know" or something to that effect, and that's exactly what most people would probably recommend when it comes to dealing with the tax system, especially given the way the IRS is known to look upon deductions that business people take. Without knowing in advance what is and isn't deductible and what kind of documentation is required to support those deductions the cost of this great resource and the time that would be invested in reading through it will seem like a drop in the proverbial bucket.

The majority of the text in this book is geared toward corporations and larger partnerships. The reality is that any serious business, with funding and investors, is going to have an accountant who should be well versed in what's deductible and what's not and, many, will have access to a tax lawyer for more complicated matters.

That leaves smaller businesses and sole proprietors, the people who are the most likely to purchase a book like this. In my opinion, that is where this book seems to fail: it seems to gloss over some of the tax considerations that affect independent contractors and freelancers. For example, in the chapter regarding home office deductions the specifics for a sole a proprietor are contained in a single paragraph that essentially asks the reader to obtain and read the IRS form about home office deductions. While that might be useful for someone, most people will probably find themselves frustrated by being told to seek out another publication.

If you're just starting out or are a seasoned pro in the self-employed universe but are still confused about what's deductible and what's not you should check out June Walker's Self-employed Tax Solutions which is an excellent resource for those looking for common sense advice from someone who works as an accountant and adviser to those who are self-employed.

However, if you just want a book featuring general tips about possible tax deductions you may or may not be eligible for, this title contains that information.

A JD myself, I found tax deductions for professionals to be an excellent book detailing how to ascertain the pivotal tax deductions a small business owner needs.

Fishman does a great job of putting the reader in control of the decisions he/she needs to make in order to save cash in starting their own business. In that regard, it puts the reader in the money saving space between tax attorney and accountant. The reader can understand how to gain deductions from the instant the business is incorporated and hiring their first employee.

In a typical NOLO fashion, the book is incredibly easy to read. Highly recommended to small business owners who want to put their accountants / tax attorneys in their place with missed opportunities.

This book is written for the person who has a professional practice. Larger group practices ought to have a CPA, of course, and regularly consult with a tax lawyer. Nevertheless, I think it's a good idea for the practitioner to review this book and be prepared to ask questions. The small practice generally ought to have tax professionals and / or good tax software. This book covers a lot of the tax code. I don't know how they'd cover 150,000 pages of tax code but they APPEAR to have covered a lot of it. It's easy to use and includes a pretty full index to guide you to your questions / answers. I like this series. Its a book that ought to be used as a reference for all kinds of professionals. I don't think that its a resource for complex tax matters. Likewise, I don't think it should substitute for tax professionals. I give this book a solid A.

This is a very useful guide for new and old professionals that fill out their own tax returns and want to maximize their deductions. It is also specially helpful to those that want to clarify some doubts about what you can claim in your tax returns. If you are a new professional, this guide will specially be helpful to you.

This guide is help of useful information and often provides profession specific guidance. For example, I am a lawyer. As such, a few years ago I had to pay ridiculous amounts of money on bar exam fees; they are not tax deductible. I already knew this, but it helped seeing it on paper again. (It actually felt like a stab in the chest, but whatever).

The Nolo guide is very well written. It explains in a simple, yet thorough, manner some basic knowledge about taxes for professionals. This guide is a clear as they come and it is a great resource to have if you are starting out a new business.

Another great Nolo book. I have owned my own consulting business since 2006. I have worked with a tax account since that time. I thought I knew all of deductions I could take, but this book really opened my eyes to several more I could be taking. It also made me rethink some of the ones I have taken in the last few years.

I also found the book to be really helpful with the foundation information for starting your own business. For example, it explains all of the different types of of businesses you can own, such as S Corp, C Corp, etc.

I would highly recommend this book even if you have already started your business and would also recommend this book to those that are thinking about starting a business.