Self employed

To enter your business income and expenses:

• From the Federal menu, click on Income & Expenses
• Expand the menu for Self-Employment
• Click Start/Revisit next to Self-employment income & expenses
• Edit next to the business or Add the business if needed
• Include the 1099-MISC in the income section for your business and add any additional payments received, even if a 1099-MISC is not generated

There are three common tests for deductibility of business expenses:

1. Ordinary and Necessary - The expense must be ordinary and necessary. Generally, this means that the expense is commonly found in the specific business, and is helpful and appropriate in running the business.
2. Business Purpose - Expenses must have a legitimate business purpose to be considered deductible.
3. Reasonableness - The tax law requires that the deductions be reasonable to be deducted.

The resources below are useful for understanding common business deductions.

Taking Business Tax Deductions

What self-employed expenses can I deduct?

Business Use of Vehicles

The Home Office Deduction

IRS Publication 535