Members of the Maryland Association of Certified Public Accountants are answering tax questions through April 15.
I started a small home-based business in 1998. What business-related expenses can I deduct from my personal income tax?
As a business owner you may deduct 45 percent of the cost of your health insurance premiums (60 percent of the cost is deductible in 1999). You may also deduct business-related meals and entertainment. For example, you may deduct the cost of dinner out with your client or spouse as long as you conducted business immediately before or after the meal.
These unreimbursed business meal and entertainment expenses are considered miscellaneous expenses, which are deductible to the extent that they and other miscellaneous expenses exceed 2 percent of your adjusted gross income. You may also deduct certain expenses related to your home office, as long as there is no other fixed location where you conduct substantial administrative or management activities of your business. Your home office must be used exclusively, on a regular basis, as a place of business.
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.
To ask a tax question, call Sundial, The Sun's telephone information service, at 410-783-1800. Call 410-268-7736 in Anne Arundel County, 410-836-5028 in Harford County, 410-848-0338 in Carroll County. Using a Touch-Tone phone, punch in the four-digit code 6225 after the greeting. To submit questions by e-mail and access an online tax guide, go to The Sun's Web site at www.sunspot.net/tax.
Selected questions will be answered in the Business section. No questions will be answered personally.
Pub Date: 2/23/99