• Schoelles and Associates

Last minute year-end tax tips for businesses.

*Pay final bills and postmark by 12/31/2020


*Newly purchased business equipment must be placed in service by 12/31/2020 to be deductible


*Business expenses paid by credit cards are deductible when charged, not when paid


*Purchase up to 12 months of business supplies – deductible when bought


*Pay employee bonuses at year-end


*If your home was used for business this year, there are three options to deduct certain expenses. The reimbursement is deductible by the business and not income to the recipient. If you are a sole proprietor and report your activity on C, E or F, these expenses are reported on your personal return. If you are taxed as a corporation, the expenses are reported on Form 1120 or 1120S. If you are taxed as a partnership, it depends on the partnership agreement.

1) Home office – separate space used regularly for business

Make last payments for utilities, insurance, any repairs

Calculate the footage used for office as percentage of total heated area

The corporation can reimburse you for the business % of expenses

It is a deduction to the corporation and not income to recipient

2) Home used for business less than 15 days

Business purposes-events, meetings with employees, vendors or clients

Examples-prepare marketing or training videos for customers/employees

Document purpose, attendees, cost of food or supplies

Business can reimburse for use of home and out of pocket expenses

3) Employees working from home due to Covid-19

Sec 139 – Business can reimburse for out-of-pocket expenses

Portion of internet, utilities

Supplies purchased by employee

· Office Supplies

· Headphones

· Surge protectors

· Standby power systems

· Security software to protect data


*New bill signed Sunday provides additional relief for families and businesses. Find out what you qualify for.

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