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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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A business owner files for an extension due to the nature of

Resolved Question:

A business owner files for an extension due to the nature of her business. She wishes to start a SEP for herself in 2008. What is the latest date dhe may establish the plan and still make contributions for 2008? I think it is April 17, 2009.

Can a self-employed taxpayer who uses the standard mileage rate deduct finance charges paid on the car loan? I think not.

A sole proprietor with a tentative loss on line 29 of Schedule C may deduct mortgage interest as an expense for qualified business-use-of home. Is this true or false? I think it is true.
Submitted: 4 years ago.
Category: Tax
Expert:  Merlo replied 4 years ago.
HelloCustomer

A SEP can be set up for a year as late as the due date (including extensions) of the business’s income tax return for that year.

 

http://www.irs.gov/retirement/article/0,,id=111419,00.html#6

If a self employed taxpayer uses the standard mileage rate for business use of his vehicle, then most other actual expenses may not be claimed. However, this is not true regarding finance charges paid on the car loan. If you are self employed and use your car in business, then even if you use the standard mileage rate, you may claim a deduction for interest you paid on your car loan, in the same percentage as the percentage you use your car for business. Refer to page 16 of the following publication.

http://www.irs.gov/pub/irs-pdf/p463.pdf

Mortgage interest can be claimed for qualified business use of home, even if line 29 shows a tentative loss. While there are some expenses which cannot be deducted if a loss is shown on line 29, mortgage interest is not one of them. The reason for this is that mortgage interest would still qualify as a regular deduction on Schedule A.

http://www.irs.gov/publications/p587/ar02.html#en_US_publink100013757

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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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