Page 10: Secular Business Income and Expenses (Continued)

Skip this page if you skipped page 9 — or if your business bought no equipment, carries no stock, is not run from your home, and you employed nobody in your home.

You need this page if you completed page 9 and bought equipment or a vehicle for the business, hold inventory, work from a dedicated space at home, or paid someone who works in your home.

What this page does. It carries on from page 9 with the four things that do not fit an expense line: equipment you bought, inventory, a home office, and anyone you employed in your home.

Before You Begin

Please gather the following records before completing this page:

• Receipts or invoices for business equipment and asset purchases
• Inventory records showing beginning and ending inventory balances
• Home utility, insurance, mortgage, rent, and property tax information
• Home square footage measurements
• Household payroll records, if applicable

Having these documents available will make completing the page much easier and help ensure accurate reporting.

Business Assets and Equipment

This section is used to report property purchased for your business that will be used for more than one year.

Examples may include:

• Computers
• Printers
• Cameras
• Furniture
• Machinery
• Business vehicles
• Tools and equipment

For Each Asset, Please Provide:

• Business letter (A, B, C, or D) matching the business reported on Page 9
• Description of the asset
• Total cost, including sales tax, shipping, and installation
• Percentage used for business
• Date first placed into business use
• Date sold, traded, or disposed of, if applicable
• Amount received when disposed of

Example

If you purchased a laptop for $1,500 and use it 80% for your consulting business:

• Description: Laptop Computer
• Cost: $1,500
• Business Use: 80%
• Date Placed in Service: Date first used for business

Cost of Goods Sold (Inventory)

Complete this section only if your business keeps inventory or sells products.

Examples include:

• Retail sales
• Online stores
• Product-based businesses
• Businesses that manufacture goods

Enter the Following Information:

Beginning Inventory

• Value of inventory on hand at the start of the year

Purchases

• Inventory purchased for resale during the year

Personal Withdrawals

• Products removed for personal use

Labor Costs

• Labor directly connected with producing inventory

Materials and Supplies

• Items used to create products for sale

Other Costs

• Any additional inventory-related costs

Ending Inventory

• Value of inventory remaining at year-end

The organizer will automatically calculate the cost of goods sold.

If your business does not maintain inventory, you may leave this section blank.

Home Office Deduction

If you use part of your home regularly and exclusively for your business, you may qualify for a home office deduction.

Step 1: Measure Your Office Space

Enter:

• Square feet used for business
• Total square feet of your home

The organizer will calculate the business-use percentage automatically.

Step 2: Enter Household Costs

Depending on your living situation:

If You Rent

Enter:

• Total rent paid during the year

If You Own Your Home

Enter:

• Mortgage interest
• Real estate taxes

Additional Household Expenses

Please enter your total annual household costs for:

• Utilities
• Homeowners or renters insurance
• Repairs and maintenance

Important

Enter the full household amounts, not your estimate of the business portion.

The organizer will calculate the appropriate business percentage automatically.

Household Employees

Complete this section only if you had household employees during the year.

Examples may include:

• Caregivers
• Nannies
• Housekeepers
• In-home attendants

No Household Employees?

If you did not employ anyone in your household, simply check the appropriate box and move on.

If You Had Household Employees

Please provide:

• Household Employer EIN
• State employer registration number
• State unemployment tax rate

Then enter information for each employee:

• Name
• Social Security Number
• Cash wages paid
• Federal tax withheld
• State tax withheld
• Payroll taxes paid by a payroll service, if applicable

Common Mistakes to Avoid

Enter the Asset Cost, Not the Loan Amount

When reporting equipment or other assets, enter the actual purchase price of the item.

For example:

✅ Computer purchased for $2,000

Not:

❌ Loan balance or monthly payment amount

We need the cost of the asset itself.

Use the Date the Asset Was First Used

The most important date is when the asset actually began being used in your business.

This may be different from the date you purchased it.

For example, equipment purchased in December but first used in January generally goes into service in January.

Home Office Rules Are Strict

To qualify for a home office deduction, the space must be used:

• Regularly, and
• Exclusively for business

A room that doubles as a guest room, family room, or personal office generally does not qualify.

However, a clearly separated area used exclusively for business may qualify.

Home Office Expenses Are for Schedule C Businesses Only

The home office section applies to self-employed businesses reported on Schedule C.

It generally does not apply to:

• Clergy W-2 employment
• Church employee expenses
• Unreimbursed employee business expenses

If you’re unsure whether your situation qualifies, simply let us know in the comments section.

Enter Total Household Costs

Please report the full annual cost for:

• Utilities
• Insurance
• Repairs
• Other household expenses

Do not calculate the business percentage yourself. The organizer will do that automatically.

Household Employees Are Different from Independent Contractors

A household worker may be considered an employee if you control:

• Their schedule
• Their duties
• How the work is performed

If you’re unsure whether someone should be treated as an employee or an independent contractor, please describe the arrangement in the comments section and we’ll help determine the correct treatment.

Match the Business Letter from Page 9

Every asset should be assigned to the same business letter used on Page 9.

For example:

• Business A assets belong with Business A income and expenses.
• Business B assets belong with Business B income and expenses.

Using the correct business letter helps ensure assets are reported on the proper Schedule C.

When You’re Finished

Before moving on, take a moment to review the following:

✓ Assets and equipment have been listed

✓ Inventory information has been completed, if applicable

✓ Home office measurements and expenses have been entered

✓ Household employee information has been provided, if applicable

✓ Business letters match the businesses reported on Page 9

✓ Any unusual situations have been explained in the comments section

Providing complete information on Page 10 helps us maximize available deductions and accurately report your business activities. If you’re uncertain about an asset purchase, home office qualification, or worker classification, simply include a note for us and we’ll be happy to review it with you.