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5. Expenses Not Allowed as a Cost of Doing Business Include, but are not limited to: a. Depreciation; b. Amortization; c. Net losses from previous periods; d. Federal, state, and local incometaxes; e. Monies set aside for retirement purposes, except when paid for a non-household member employee; f. Personal work-related expenses such as transportation to and from work, including costs to travel outside the home community to work, regardless of the distance or mode of transportation; and child and/or dependent care costs; g. Normal living expenses incurred by the self-employed individual and family members, such as shelter and food; h. Personal costs for the self-employed individual and his or her family such as life and medical insurance, andshelter; i. Food or entertainment, unless it is for the purpose of generating business; j. Purchase price of durable goods; k. Payments on the principal of a loan to purchase capital assets, equipment, machinery, and other durable goods; and/or l. Undeclared costs of doing business.

6. Sole Proprietor, Partnerships and Corporations Considerations for Income A self-employed business type is determined by the owner or number of owners and the business agreement between the parties. Income to be considered is based on the type of business, so the type of business must first be determined.

a. Sole Proprietor When a self-employment enterprises is owned and operated by a single individual, all of the business income belongs to that individual. The individual’s name must be on the State of Alaska business license as the owner. The individual’s self- employment income is determined by subtracting the total allowable costs of doing business from the gross self- employment income. Any salary or disbursement received by the individual from the business is not considered in the calculation of the gross self-employment income. Sole proprietors file Internal Revenue Service Schedule C (Form 1040) Profit or Loss From Business (Sole Proprietorship) for tax purposes.