certified public accountant

Business Expense Report

What amounts do I enter on this report?
Some expenses are both personal and job related, such as cell phones. In these situations, we apply a percentage
to the overall expense to determine the deductible portion. For example, if you own rental properties the percent-
age that we use depends on the number of rental units and whether you use a management company. We also use
this same calculation for internet charges incurred at home. Therefore, please enter full amounts when listing cell
phone and internet charges.

If you are also completing a Flight Crew Expense Report, we will allocate your cell phone and internet charges
accordingly to maximize the business and job-related portions of your expenses. For all other expenses, please
only enter the business portion of the expense. For example, you spent $160 last year on printer paper and one-
fourth of it was used for printing leases, invoices, etc.; you should only enter $40, or 25% of $160.

To summarize- for cell phones and internet charges, please enter the full amount. For all other expenses, only
enter the business related portion.

Rental Properties Worksheet

Use this to record your expenses associated with your rental properties. Please make additional copies if you have
multiple rental properties. Generally speaking you will have vehicle expenses associated with your rental proper-
ties- please use the Vehicle Expense Worksheet to enter this information. Unless you are a Real Estate Professional
as defined by the IRS, you will be unable to deduct the business use of your home (home office) for your participa-
tion in your rental properties.

Small Business Worksheet

Use this to record your expenses associated with your small business. If you have multiple businesses, please
make additional copies. Generally speaking you will have vehicle and home office expenses associated with your
small business- please use the Vehicle Expense Worksheet and the Home Office Worksheet to enter this informa-
tion.

Vehicle Expense
If you use your vehicle in your job or business and you use it only for that purpose, you may deduct its entire cost
of operation (subject to limits discussed later). However, if you use the vehicle for both business and personal
purposes, you may deduct only the cost of its business use.

You can generally figure the amount of your deductible vehicle expense using one of two methods: the standard
mileage rate method or the actual expense method. If you qualify to use both methods, before choosing a
method, you may want to figure your deduction both ways to see which gives you a larger deduction. Typically
using the standard mileage rate will exceed the actual costs of operating your vehicle.

To use the standard mileage rate, you must own or lease the vehicle; the vehicle must not be used to transport
persons or property for compensation or hire, for example as a taxi; you must not operate five or more vehicles at
the same time, as in a fleet operation. Further, once you elect to use actual expenses, you can no longer use the
standard mileage rate in any subsequent years. However, you may switch from the standard mileage rate to actual
expenses- but again, once you switch to actual expenses you cannot switch back to the standard mileage rate.
And for a vehicle you lease, you must use the standard mileage rate method for the entire lease period (including
renewals).
Page 1 of 7

719-338-3054 (cell) | 866-875-5673 (fax) | tinawatsoncpa@gmail.com | www.tinawatsoncpa.com

tax preparation | accounting services | defense contractor compliance
Only business-related miles are deductible. If you are not claiming a home office, then the miles between your
home and your clients are considered commuting miles, and therefore non-deductible. However, all miles
between clients and / or other business-related travel is deductible. If you have a home office, then this is gener-
ally considered a “place of business” and those miles between your home office and your clients are deductible. If
you need additional clarification on this subtle difference, please contact us.

To use the actual expense method please determine the various costs (gas, oil, repairs, tires, insurance, deprecia-
tion, lease payments, etc.) of operating your vehicle. However, only the portion of expenses attributed to business
use are deductible. Therefore, we will use the number business miles driven compared to the overall miles to
calculate the percentage. Other vehicle expenses for parking fees and tolls related to business use are separately
deductible, whether you use the standard mileage rate or actual expenses.

There are two questions on your Federal tax return which we usually answer Yes. First, Do you (or your spouse)
have another vehicle available for personal use? Second, Do you have written evidence to support your deduc-
tion? If you cannot answer Yes to these questions, more discussion is usually required.

Home Office Worksheet

Please complete the home office worksheet to claim a home office deduction. Generally you can deduct business
expenses that apply to a part of your home only if that room or space is exclusively used on a regular basis as your
principal place of business. There are special considerations for storage of inventory and child care facilities.

Your home office will qualify as your principal place of business if you use it exclusively and regularly for adminis-
trative activities and you have no other fixed location where you conduct substantial administrative activities. For
example, you cannot claim a home office deduction if you occasionally work from home, but otherwise have an
office at your employer’s place of business.

When claiming expenses related to your home office, there are direct and indirect expenses. Direct expenses, such
as paint, are only for the business / home office portion of your home. Indirect expenses, such as insurance and
utilities, are for running your entire home.

We will not need copies of your documentary evidence or records (i.e. receipts) to prepare your tax return. This is
only in the event your tax return is examined by the IRS.

Finally, the more effort you put into detailing all your business expenses on the following pages, the better and
more complete your tax return will be.

Thank you in advance, and we’ll talk to you soon!

Tina Watson, CPA Jason Watson, SkyWest Airlines Pilot DEN

(719) 338-3054 cell (719) 641-0201 cell
tinawatsoncpa@gmail.com jasonwatson@earthlink.net

Page 2 of 7

719-338-3054 (cell) | 866-875-5673 (fax) | tinawatsoncpa@gmail.com | www.tinawatsoncpa.com

tax preparation | accounting services | defense contractor compliance
Name: _______________________________

Rental Properties Worksheet

Property Address ___________________________________________________________________________
Date Property was Placed in Service _____________________________________
Purchase Price or Fair Market Value _____________________________________
Portion of Price / Value Attributed to Land _____________________________________

Rents Received _____________________________________

Advertising _____________________________________
Cleaning and Maintenance _____________________________________
Commissions _____________________________________
Insurance _____________________________________
Legal / Professional Fees _____________________________________
Management Fees _____________________________________
Mortgage Interest (incl. PMI) _____________________________________
Other Interest _____________________________________
Repairs _____________________________________
Supplies _____________________________________
Taxes _____________________________________
Utilities _____________________________________
HOA Dues _____________________________________
Cell Phone Expense _____________________________________
Internet Expense _____________________________________
Other _______________________________ _____________________________________

Did you sell or dispose of this property last year? YES NO

Did you use the property for personal use last year? YES NO
Did you use a vehicle to manage this property? YES NO

Page 3 of 7

719-338-3054 (cell) | 866-875-5673 (fax) | tinawatsoncpa@gmail.com | www.tinawatsoncpa.com

tax preparation | accounting services | defense contractor compliance
Name: _______________________________

Small Business Worksheet

Principal Business or Profession ______________________________________________________________________________
Business Name (if applicable) ______________________________________________________________________________
Business Address ______________________________________________________________________________
Business Start Date ______________________________________

Sales / Income (reported on 1099s) ______________________________________

Sales / Income (NOT reported on 1099s) ______________________________________
Returns and Allowances ______________________________________
Cost of Goods Sold ______________________________________
Other Income ______________________________________

Advertising ______________ Supplies ______________

Commissions and Fees ______________ Taxes and Licenses ______________
Contract Labor ______________ Travel ______________
Depletion ______________ Meals and Entertainment ______________
Employee Benefit Programs ______________ Utilities ______________
Insurance (other than health) ______________ Wages ______________
Mortgage Interest ______________ Cell Phone ______________
Other Interest ______________ Internet Expense ______________
Legal, Professional Services ______________ Taxes and Licenses ______________
Office Expense ______________ Travel ______________
Pension, Profit-Sharing Plans ______________ Other ______________ ______________
Machinery, Vehicle Lease ______________ Other ______________ ______________
Rent ______________ Other ______________ ______________
Repairs and Maintenance ______________ Other ______________ ______________

Is all of your investment at risk? YES NO

Did you use a vehicle to operate this business? YES NO

Page 4 of 7

719-338-3054 (cell) | 866-875-5673 (fax) | tinawatsoncpa@gmail.com | www.tinawatsoncpa.com

tax preparation | accounting services | defense contractor compliance
Name: _______________________________

Vehicle Expense Worksheet

Year, Make and Model of Vehicle #1 ____________________________________________________________________________
Date Vehicle was Placed in Service for Business Use _____________________________________
Date Vehicle was Disposed or Not Used for Business Use _____________________________________
Business Use (small business, rental property, job-related) _____________________________________
Actual Operating Expense (if using that method) _____________________________________
Approximate Odometer Dec 31 or Disposal Date (whichever is earlier) _____________________________________
Approximate Odometer Jan 1 or Service Date (whichever is later) _____________________________________
Personal Miles _____________________________________
Commuting Miles _____________________________________
Business Miles* _____________________________________
* Business miles will be the difference of ending odometer less starting odometer, personal miles and commuting miles.

Year, Make and Model of Vehicle #2 ____________________________________________________________________________

Date Vehicle was Placed in Service for Business Use _____________________________________
Date Vehicle was Disposed or Not Used for Business Use _____________________________________
Business Use (small business, rental property, job-related) _____________________________________
Actual Operating Expense (if using that method) _____________________________________
Approximate Odometer Dec 31 or Disposal Date (whichever is earlier) _____________________________________
Approximate Odometer Jan 1 or Service Date (whichever is later) _____________________________________
Personal Miles _____________________________________
Commuting Miles _____________________________________
Business Miles* _____________________________________
* Business miles will be the difference of ending odometer less starting odometer, personal miles and commuting miles.

Page 5 of 7

719-338-3054 (cell) | 866-875-5673 (fax) | tinawatsoncpa@gmail.com | www.tinawatsoncpa.com

tax preparation | accounting services | defense contractor compliance
Name: _______________________________

Home Office Worksheet

Property Address _______________________________________________________________________________________________________
Date Home Office was Placed in Service _____________________________________
Purchase Price or Fair Market Value of Home _____________________________________
Portion of Price / Value Attributed to Land _____________________________________

Area Used as Home Office (sqft) _____________________________________

Total Area of Home (sqft) _____________________________________

Direct Expense Indirect Expense

Casualty Losses _____________________________________ _____________________________________
Mortgage Interest _____________________________________ _____________________________________
Real Estate Taxes _____________________________________ _____________________________________
Insurance _____________________________________ _____________________________________
Rent _____________________________________ _____________________________________
Repairs and Maintenance _____________________________________ _____________________________________
Utilities _____________________________________ _____________________________________
HOA Dues _____________________________________ _____________________________________
Other ______________________ _____________________________________ _____________________________________
Other ______________________ _____________________________________ _____________________________________

Did you make any substantial improvements for this home office? YES NO
Did you operate a child care facility in your home? YES NO

Page 6 of 7

719-338-3054 (cell) | 866-875-5673 (fax) | tinawatsoncpa@gmail.com | www.tinawatsoncpa.com

tax preparation | accounting services | defense contractor compliance
Disclosure
I (We) verify that the information provided in this Business Expense Report is accurate and complete. I (We) under-
stand it is my (our) responsibility to include any and all information concerning income, deductions and other
information necessary for the preparation of my (our) personal income tax return.

I(We) understand that business expenses on a tax return might increase the possibility of an audit.

Taxpayer Signature: _____________________________________________________ Date: ______________________________

Spouse Signature: _____________________________________________________ Date: ______________________________

Page 7 of 7

719-338-3054 (cell) | 866-875-5673 (fax) | tinawatsoncpa@gmail.com | www.tinawatsoncpacom

tax preparation | accounting services | defense contractor compliance