How to code expense?

[BHoffman]

Working with Sch C.  Client is very involved with a MLM thing, selling supplements.  He attends sales seminars that cost about $2k per year.  His taxable income is about $100k per year.  I'm not sure how to code the seminar expense.  Advertising, since they give out advice and promo materials?  Or "Other" and list it as "Seminar expense"?

Happy Summer!

[Jack from Ohio]

"Other" and list it as seminar expense.

[RitaB]

I like "Marketing Seminars Expense".

 

[BHoffman]

Thanks!  I don't know why I have this weird aversion to listing things in that "other" section.  

[Jack from Ohio]

If it is legitimate expenses and there is not a line that better fits, use it. 

I have seen Sched. C with almost every deduction listed there instead of on the front.

[Lion EA]

Continuing Education

[RitaB]

13 minutes ago, Jack from Ohio said:

I have seen Sched. C with almost every deduction listed there instead of on the front.

Yes, me too.  You can go too far in either direction.  LOL.

 

[RitaB]

30 minutes ago, RitaB said:

I like "Marketing Seminars Expense".

If it's mostly for marketing purposes.   If not, ignore me.

[SaraEA]

I believe preparers who put most expenses on the "other" line have a method to their madness.  A detailed list of expenses helps you know what to look for the following year and to catch anything that's missing.  If someone has a service contract for their HVAC and you lump it in with utilities, you might not remember to ask about the cost the following year.  And some of the categories on the C, and the E for that matter, are so broad you're sure to miss things.  "Office expense," for example, includes paper, toner, postage, maybe the IT guy and window washers, etc.  If the total seems too high it could raise a flag, so maybe it's best to break out a few of the included items and put them on "other."  There most be a middle ground for using that line.....

[Catherine]

15 hours ago, SaraEA said:

A detailed list of expenses helps you know what to look for the following year and to catch anything that's missing.

I try to make subsidiary worksheets for all those break-outs.  Specifically because of the items that I would otherwise forget to ask about.  Just this year, a client who pays a monthly fee for "suite maintenance" (basically the landlord bills separately for cleaning and snow removal) forgot to include it.  It was in my worksheet, so off went the email query.  Those worksheets prevent the "Other" section from getting overcrowded; another benefit.

[Abby Normal]

I try to break clients of lumping expenses together for the very same reason. I have one doctor who lumps differently every year. I had a talk with him this year after being thoroughly confused.

[Lion EA]

My software has a List feature.  I click on the icon anytime I want a detailed list behind a line.  Utilities, for instance, in office in home; out here in the boonies that's oil and electricity and maybe something more specific to that client's house like propane.  I even use it for just one item when I want to remember where it came form.  For instance, when the mortgage interest is paid to ABC Bank; so if I get a 1098 next year from XYZ Bank I ask them if they refinanced, got a HELOC, forgot to bring me ABC, whatever.  They think I have a great memory when I ask about their alarm system expense, for example, that they had last year but forgot this year.  Helps for nurses and such that have various license renewals that might be every two years or one or three.  I use List a lot.

[BHoffman]

I can double click on the expense field and a list page will open.  I use that a lot for the same reason.

[Abby Normal]

Ctrl+I in ATX gives you an itemized list.

[Terry D EA]

I too want detailed lists. It is important to be able to know what the total amount is made up of. Same on schedule A. I have had to defend a total amount entered on the mortgage interest line. When the IRS questioned the total, which at the time was weird they did so, it was relatively easy to show the breakdown and retrieve the necessary documents from the client. Had I not listed the detail, then we all know where that could have gone. Most of the software I have used allows you to enter details. Nothing worse, in my opinion, then a client who comes to you with a return that is messed up and no detail.