Daniel is a self-employed consultant. Until this year he was always an employee. He comes to discuss his new business with you. As his tax accountant, you should: A. Discuss all of the above B. Discuss the self-employment tax, as well as the income tax, on business earnings in order to help Daniel estimate what he might owe in taxes for the year C. Discuss setting up a good record-keeping system for his new business D. Discuss the substantiation requirements for meals and entertainment. E. Discuss the rules for deducting automobile expenses
Solution:-
Daniel is a self-employed consultant. Until this year he was always an employee. He comes to discuss his new business with you. As his tax accountant, you should:-
A. Discuss all of the above
Explanation:-
Discuss all of these choices:
-Discuss setting up a good record-keeping system for his new
business.
-Discuss the substantiation requirements for meals and
entertainment.
-Discuss the self-employment tax, as well as the income tax, on
business earnings in order to help Daniel estimate what he might
owe in taxes for the year.
-Discuss the rules for deducting automobile expenses.
Note: The term trade or business is not formally defined, although
the term is used often in the Internal Revenue Code. When you are
self-employed, the burden to show that expenses qualify falls to
the individual.
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