Expensive agenda book/organizer. Office expense or fixed asset?
If your business pays taxes, it is in your best interest to expense it. Even if you don't pay taxes, setting your capitalization policy low enough to capitalize an office organizer (even a nice one) will give you headaches when your business grows larger. I cannot imagine an organizer being worth enough to consider depreciating the expense over a period of time greater than one year. Also, once you write in an organizer, it's pretty much worthless to anyone else. Talk to your accountant if you'd like, but I cannot see how you would classify a fancy organizer as a fixed asset.
Straight line depreciation is marginal as far as I understand. It would be a flat expense each year. Unless you mean 2 mil year one and 4 mil for years one and two combined and it's just written ambiguously here. It seems pretty straight-forward to me. 10 mil rev per year operating increase. 6.5 mil operation expense increase. Net income= rev-expenses. Depreciation expense is not an operating expense. As far as relevant cash flows I guess if there's not omitted info in this post would just be the cash for the initial investment, the added expenses, the added revenue, the salvage sale. I received a $2,000 bonus... Gross Income is income from whatever source derived, including (but not limited to) “compensation for services, including fees, commissions, fringe benefits, and similar items.”  Adjusted Gross Income is defined as gross income minus adjustments to income.  My question is, must I still report this money on my tax return and if so, how? Yes, and it would be on line 21 of your 1040 with supporting documentation. Are these legal fees deductible as an expense, and where would I list them? Yes, you would aggregate your deductible expenses and place these on your Schedule A. Instructions here. Good Luck. Edit: As Ben Miller pointed out in the comments, the deduction would be placed in either line 23 or 28 depending on the nature of the attorney (investment related or not). In your journal entry, debit the appropriate expense account (office supplies, etc) and credit your equity account.  The equity account should be called something like Partner Investments or something like that. You can choose to enter these all separately, on the specific dates listed, or as one entry.  Some people choose to summarize the expenses they've paid personally and only enter one entry per month or so, to minimize data entry time and also because the end effect is the same. Of course, the above is assuming you are considering these purchases to be investments in the company, and not expecting the company to repay you.  If you are expecting repayment, you could enter a bill instead, or credit an account like 'Loan from Shareholder' rather than the equity account. "First, please allow me to recommend that you do not try gimmickry when financials do give expected results.  It's a sure path to disaster and illegality.  The best route is to first check if accounts are being properly booked.  If they are then there is most likely a problem with the business.  Anything out of bounds yet properly booked is indeed the problem. Now, the reason why your results seem strange is because investments are being improperly booked as inventory; therefore, the current account is deviating badly from the industry mean. The dividing line for distinguishing between current and long term assets is one year; although, modern financial accounting theorists & regulators have tried to smudge that line, so standards do not always adhere to that line. Therefore, any seedlings for resale should be booked as inventory while those for potting as investment.  It's been some time since I've looked at the standards closely, but this used to fall under ""property, plant, & equipment"".  Generally, it is a ""capital expenditure"" by the oldest definition.   It is not necessary to obsess over initial bookings because inventory turnover will quickly resolve itself, so a simple running or historical rate can be applied to the seedling purchases. The books will now appear more normal, and better subsequent strategic decisions can now be made." Your home doesn't belong to the partnership, it belongs to you. So you can (if qualified) deduct home office usage as a business expense on your individual tax return. Same goes to your partner. Similarly any other unreimbursed expense. I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg.   I wish you the best of luck finding something,  but I wasn't able to.   S&amp;P and Morningstar have some stuff on their site,  but I wasn't able to make use of it.  Edit: Also,  Bloomberg allows shared terminals.  Depending on how much you think as a firm,  these questions might come up,  it might be worth the 20k / year Not a direct answer, but... a friend pointed out to me that z proper luxury limo, if loaded with four sales reps going to the same meeting, is cheaper than airfares would be and lets them hold a planning meeting en route. Yeah, most of it is conspicuous consumption.  But some of the road yachts have legitimate uses. Thanks for helping me gauge my expectations for this project. The more advanced stuff may require an exception then. I guess they are looking to knock off the casual Excel users while making exceptions for the more advanced Corporate Finance/Financial Reporting team. Thanks for your input though, can I ask you what your organization does and what areas you did have success in transitioning to GSuite? Your best approach is to assess rent levels in your local area for offices of a similar size. You need to take into account all the usuals - amenities, parking, etc, just as if your home-office was provided by a third-party. Get your $/sq ft and work out the monthly amount. With this figure, you need to then work out what % of it you can charge. If the space is used exclusively for the business, charge 100%. If it's used about half the time, charge 50%, etc. I would strongly advise you to do two things - 1. make sure your accountant and your attorney help you get this squared away. 2. document everything about how you arrived at the cost. Nothing fancy, but dates, realtors, addresses, $/sq foot. A simple table will do. By doing these two things, if the IRS should come around to chat, you should be covered. "To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.  (IRS, Deducting Business Expenses) It seems to me you'd have a hard time convincing an auditor that this is the case.  Since business don't commonly own cars for the sole purpose of housing $25 computers, you'd have trouble with the ""ordinary"" test.  And since there are lots of other ways to house a computer other than a car, ""necessary"" seems problematic also." "Bookkeeping and double-entry accounting is really designed for tracking the finances of a single entity. It sounds like you're trying to use it to keep multiple entities' information, which may somewhat work but isn't really going to be the easiest to understand. Here's a few approaches: In this approach, the books are entirely from your perspective. So, if you're holding onto money that ""really"" belongs to your kids, then what you've done is you're taking a loan from them. This means that you should record it as a liability on your books. If you received $300, of which $100 was actually yours, $100 belongs to Kid #1 (and thus is a loan from him), and $100 belongs to Kid #2 (and thus is a loan from her), you'd record it just that way. Note that you only received $100 of income, since that's the only money that's ""yours"", and the other $200 you're only holding on behalf of your kids. When you give the money to your kids or spend it on their behalf, then you debit the liability accordingly and credit the Petty Cash or other account you spent it from. If you wanted to do this in excruciating detail, then your kids could each have their own set of books, in which they would see a transfer from their own Income:Garage Sale account into their Assets:Held by Parents account. For this, you just apportion each of your asset accounts into subaccounts tracking how much money each of you has in it. This lets you treat the whole family as one single entity, sharing in the income, expenses, etc. It lets you see the whole pool of money as being the family's, but also lets you track internally some value of assets for each person. Whenever you spend money you need to record which subaccount it came from, and it could be more challenging if you actually need to record income or expenses separately per person (for some sort of tax reasons, say) unless you also break up each Income and Expense account per person as well. (In which case, it may be easier just to have each person keep their entirely separate set of books.) I don't see a whole lot of advantages, but I'll mention it because you suggested using equity accounts. Equity is designed for tracking how much ""capital"" each ""investor"" contributes to the entity, and for tracking a household it can be hard for that to make a lot of sense, though I suppose it can be done. From a math perspective, Equity is treated exactly like Liabilities in the accounting equation, so you could end up using it a lot like in my Approach #1, where Equity represents how much you owe each of the kids. But in that case, I'd find it simpler to just go ahead and treat them as Liabilities. But if it makes you feel better to just use the word Equity rather than Liability, to represent that the kids are ""investing"" in the household or the like, go right ahead. If you're going to look at the books from your perspective and the kids as investing in it, the transaction would look like this: And it's really all handled in the same way an Approach #1. If on the other hand, you really want the books to represent ""the family"", then you'd need to have the family's books really look more like a partnership. This is getting a bit out of my league, but I'd imagine it'd be something like this: That is to say, the family make the sale, and has the money, and the ""shareholders"" could see it as such, but don't have any obvious direct claim to the money since there hasn't been a distribution to them yet. Any assets would just be assumed to be split three ways, if it's an equal partnership. Then, when being spent, the entity would have an Expense transaction of ""Dividend"" or the like, where it distributes the money to the shareholders so that they could do something with it. Alternatively, you'd just have the capital be contributed, And then any ""income"" would have to be handled on the individual books of the ""investors"" involved, as it would represent that they make the money, and then contributed it to the ""family books"". This approach seems much more complicated than I'd want to do myself, though." "Thanks for the response.   I am using WRDS database and we are currently filtering through various variables like operating income, free cash flow etc.  Main issue right now is that the database seems to only go up to 2015...is there a similar database that has 2016 info?  filtering out the ""recent equity issuance or M&amp;A activity exceeding 10% of total assets"" is another story, namely, how can I identify M&amp;A activity? I suppose we can filter it with algorithm stating if company's equity suddenly jumps 10% or more, it get's flagged" "While the question is very localized, I'll answer about the general principle. My main question is with how far away it is (over 1000 miles), how do   I quantify the travel expenses? Generally, ""necessary and ordinary"" expenses are deductible. This is true for business and also true for rentals. But what is necessary and what is ordinary? Is it ordinary that a landlord will manage the property 1000 miles away by himself on a daily basis? Is it ordinary for people to drive 1000 miles every week? I'd say ""no"" to both. I'd say it would be cheaper for you to hire a local property manager, thus the travel expense would not be necessary. I would say it would be cheaper to fly (although I don't know if its true to the specific situation of the OP, but as I said - its too localized to deal with) rather than drive from Texas to Colorado. If the OP thinks that driving a thousand miles is indeed ordinary and necessary he'll have to justify it to the IRS examiner, as I'm sure it will be examined. 2 trips to the property a year will be a nearly 100% write-off (2000   miles, hotels, etc). From what I understood (and that is what I've been told by my CPA), IRS generally allows 1 (one) trip per year per property. If there's an exceptional situation - be prepared to justify it. Also, keep all the receipts (like gas, hotel, etc.... If you claim mileage but in reality you took a flight - you'll get hit hard by the IRS when audited). Also while I'm up there am I allowed to mix business with pleasure? You cannot deduct personal (""pleasure"") expenses, at all. If the trip is mainly business, but you go out at the evening instead of staying at the hotel - that's fine. But if the trip is ""business"" trip where you spend a couple of hours at your property and then go around having fun for two days - the whole trip may be disallowed. If there's a reasonable portion dedicated to your business/rental, and the rest is pleasure - you'll have to split some of the costs and only deduct the portion attributed to the business activities. You'll have to analyze your specific situation, and see where it falls. Don't stretch the limits too much, it will cost you more on the long run after all the audits and penalties. Can I also write off all travel involved in the purchase of the   property? Although, again, the ""necessary and ordinary"" justification of such a trip is arguable, lets assume it is necessary and ordinary and generally justified. It is reasonable to expect you to go and see the property with your own eyes before the closing (IMHO, of course, I'm not an authority). Such an expense can be either business or investment expense. If its a business expense - its deductible on schedule C. If its an investment expense (if you do buy the property), its added to the cost of the property (capitalized). I'm not a tax adviser or a tax professional, and this is not a tax advice. This answer was not written or intended to be used, and cannot be used, for the purpose of avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code. You should seek a professional consultation with a CPA/Attorney(tax) licensed in your State(s) or a Federally licensed Enrolled Agent (EA)." I'm trying to organize my financial papers as well.  I have a Fujitsu ScanSnap and it's tearing through my papers like a hot knife through butter (i.e. awesome). Here's how I'm addressing organizing the paper. I'm organizing mine a little bit organically.  Here are the main parts: So anyway, all that to say that it's not necessary to organize the files to the hilt.  If you want to, that's fine too, but it's a tradeoff:  up-front organization for possibly some time savings later.  The search function available is decreasing the advantage of organizing your files carefully.  If throwing all of your files in a digital pile makes your skin crawl, then I won't force you otherwise, but I'm not worried about it for the time being. What you're doing with the other tracking sounds fine to me.  Others may have different insights there. Use one journal entry, and split the expenses into the appropriate accounts. This can happen even if you never mix business and personal on the same receipt: say you order office supplies (which where I live are immediately deductible as an expense) and software or hardware (which must be depreciated because they are assets) on the same order. We have an account called Proprietors Loan which represents money the company is lending to the humans who own it, or that the humans are lending to the company. Were I to pay for my personal lunch on a business credit card, it would go through that account, increasing the amount the company has lent me or decreasing the amount I have lent it. Similarly if I made a business purchase with a personal card it would go through that account in the other direction. Where I live, I can lend my company all the money I want any time, but if the company lends me money there can't be an outstanding balance over the corporate year end. If you make two credit card entries of 5 and 10 when you go to reconcile your accounts it will be harder because you'll have to realize they together match the single 15 line on your statement. Making a single entry (your A option) will make reconciling your statement much easier. And that way, you'll probably reconcile your statements, which is vital to knowing you actually recorded everything.