7-1 Discussion (CH)

.docx

School

Southern New Hampshire University *

*We aren’t endorsed by this school

Course

650

Subject

Law

Date

Apr 3, 2024

Type

docx

Pages

Uploaded by AgentComputerSnake87

Read the scenario and respond to the prompts. Create one initial post and respond to at least two of your classmates. Yolanda, your tax client, recently started her own business as a healthcare consultant and set up an office in her home used exclusively for client meetings and other business-related activities. Yolanda has heard that having a home office can be a red flag for tax purposes and wants to make sure she carefully follows all the rules in case of an IRS audit. Yolanda has no other place of business, and her home office is the most significant place for her business. The following year, Yolanda tells you her consulting business is doing well. She has one large client, and her responsibilities to the client involve assisting the lead researcher at a medical facility. She rarely has clients at her office anymore since the researcher wants her at the medical facility from 8 a.m. to 5 p.m. during the workweek. For your initial post, address the following: 1. What advice would you give Yolanda regarding the types of home office business expenses she can deduct and which records she should maintain? 2. What impact does the new client relationship have on Yolanda's ability to deduct self-employment expenses, including the home office deduction? Consider the distinctions between employees and independent contractors. 3. What issues should the medical facility be concerned with regarding Yolanda's role at the facility? For your response post, address the following: 1. What activities can disqualify Yolanda from home office deductions? 2. How can Yolanda simplify her deductions and recordkeeping in other ways your peers did not mention?

3. Do you agree with your peers about what the medical facility should be concerned with regarding Yolanda's role at the facility? Why or why not? Hi Class, 1. Some of the advice that I would give Yolanda regarding the type of home office expenses. Since Yolanda has the consulting business located within her home and does not have any other location, she would be able to deduct expenses related to the home office. For a deduction for her home office the office has to be used in the normal course of business and also used exclusively and regularly in connection to the consulting business. For the deductions for the home office, there are expenses that are directly related to the home office and there is expense related indirectly to the home office (Rupert, Anderson, Hulse & Franklin, 2023). Direct expenses are expense that are directly related to the office, for example, office chair, painting, office desk, printer paper, office phone, etc. These expenses are directly related to the home office and would need to keep the original receipt for these expenses. Yolanda would be able to take 100% of the cost of direct expenses related to the home office. Indirect expenses would be Mortgage or rent for the entire home, real estate taxes for the home insurance, utilities, and depreciation of the home. These expenses are allotted for the space of the home office and is given a percentage based on the home office. The home office expense cannot create a loss (Rupert, Anderson, Hulse & Franklin, 2023). 2. The impact that Yolanda has with her acceptance of the large client for consulting is that she is required to assist the lead researcher at the facility and rarely has clients at the home office. Since Yolando does not have clients regularly and continuously at the location of the home office, Yolanda would not be able to take a home office deduction because she work/ has clients at the facility from 8am to 5pm. According to the text, Yolanda would be considered a employer to employee relationship based on the requirement that she has to assist the lead researcher at the facility and not and the discretion Yolanda. Yolanda would be classified as an employee. 3. The issues the medical facility would have is that they would not have classified Yolanda correctly. Since Yolanda has to appear at the facility 8am to 5pm and assist the lead research at the facility, she does not have the right to control how she would provide services with regards to the end result and how it is accomplished. The medical facility is provided these instructions to her (Rupert, Anderson, Hulse & Franklin, 2023). She should be classified as a employee and the medical facility would have matched her Social security and Medicare taxes and provide her a W-2 because she is an employee of the facility. Reference:

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help