"Steve Pope" <spope33[at]speedymail.org> wrote

Snipped a lot

- quote -

Yeah, Some of the bigger firms expense things as "supplies"
that would break a small form like me to even be able to pay
for.

Yet again, I've heard of some firms that capitalize a
trashcan and stapler.

So the reality is, have a policy that makes sense and that
you are willing to deal with.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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Paul Thomas, CPA <paulthomascpapc[at]BELLSOUTH.NET> wrote:
- quote -

Thanks for explaining this. I always wondered why the
big boys were able to expense stuff that I couldn't.

Steve

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"Ian Pilcher" <i.pilcher[at]comcast.net> wrote
- quote -

Not really. If you do that (expense the items) it would be
up to you to convince an auditor that the amount was so
small to capitalize.

I have found that any amount to-be considered "de minimis"
needs to be so in light of the total business assets,
revgenues, etc.

You might hear stories of "company policy" to expense
anything less than $500, $5,000, etc, and those ~are~ de
minimis in light of total assets for those types of firms.
So your policy might need to be toned to your specifics (any
single item less than $50). And that might seem reasonable
to an auditor.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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- quote -

Other Expenses.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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Ian Pilcher wrote:
- quote -

Even we talk to ourselves every now and then and think nothing of it.

- quote -

Those last two items ARE in fact insignificent and I would
classify them as "supplies" on a schedule c. HoWEVER.... 50000
in possible start up expenses is enough I think to warrant
getting some professional help this first time round. A good tax
pro will be able to sort things out for your wife and possibly
discover some of that 5000 just might come under ordinary operating
expenses instead.

- quote -

But, push come to shove, start up expenses are amortizable
(not depreciated) and are properly reported in the very last
section on page two of form 4562, the depreciation form.
Be sure to select the appropriate code section for one of
those columns. which brings me back to recommendation above,
competent local tax help.

ChEAr$,
Harlan Lunsford, EA n LA

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Ian Pilcher wrote:

- quote -

Good news! since you say some of the 200 consists of business
equipment which is placed in service as of first day of
business. Therefore she (not you) uses section 179, subject
to, of course, available net profit and/or other w2 income,
yours included if a joint return.

ChEAR$,
Harlan Lunsford, EA n LA

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Ian Pilcher wrote:

- quote -

Sorry for replying to myself. I found the $5,000 start-up
cost deduction soon after I posted this. I am still curious
about office equipment (a $35 financial calculator and a $10
hole punch in this case).

It also brings up another question. Where on schedule C
should deductible business start-up costs be reported? I.e. do
they belong on the appropriate lines in Part II, or should they
be reported as other expenses in Part V?

Thanks!

--
================================================== ======================
Ian Pilcher i.pilcher[at]comcast.net
================================================== ======================

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My wife had about $200 of expenses that would normally be
amortizable business start-up costs or depreciable office
equipment. Capitalizing and amortizing/depreciating these
costs/assets seems silly, given the small total.

Is there a documented "de minimis" business expense amount,
below which I can simply deduct the expense (on schedule C)
in 2005?

Thanks!

--
================================================== ======================
Ian Pilcher i.pilcher[at]comcast.net
================================================== ======================

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