Deduction Checklists For Businesses
A list of common deductible business expenses follows. You may have expenses, unique to your business, not shown on this list.
- Advertising and promotion, including charitable contributions that result in publicity for the business.
- Accounting and bookkeeping fees (including the portion of your tax return preparation fee that includes your business return)
- Bank service charges
- Car and truck expenses. You can either use the mileage rate method or the business percentage of the actual auto expenses you had (gas, insurance, repairs, lease payments, car depreciation, etc.) Deductible miles include those you drive on errands such as picking up office supplies and going to the post office.
- Contract labor, including subcontractors and consultants. 1099's must be issued in accordance with I.R.S. guidelines.
- Employee wages and employer tax liability.
- Credit card annual fees for cards used in your business. If your card is used partly for business and partly for personal expenses, pro-rate the fee accordingly.
- Computer supplies.
- Depreciation on business equipment, furniture, fixtures, computers, certain automobiles.
- Dues and fees
- Education, including seminars and conferences that increase your knowledge and skills.
- The business can fund a retirement plan for you, although the deduction may appear on your personal return, depending on which type of plan is used.
- Entertainment and business meals (these are 50% deductible)
- Gifts to business associates or clients (up to $50 per person per year is deductible)
- Qualifying home office expenses. You qualify to take the deduction if you have a space in your home that's used regularly and exclusively to do the administrative work for your business. If you claim the deduction, the business percentage of all related expenses (i.e. insurance, real estate tax, mortgage interest, rent, maintenance, etc.) can be taken. You cannot deduct your regular home line (1st telephone line into home.) You can deduct internet access, website, and secondary telephone lines, fax lines and cell phones.
- Insurance. This includes liability, malpractice, business overhead, workers compensation, and other business-related insurance. Disability insurance is not deductible.
- Interest on business credit cards and loans. As with credit card fees, interest on a card used for both personal and business expenses needs to be pro-rated.
- Legal and professional fees, including costs for preparing the business portion of your tax return
- Licenses and fees
- Magazines and books that you need for your business. General circulation publications, including the local newspaper, are usually not deductible.
- Maintenance and repairs on equipment
- Office supplies
- Parking and tolls including parking meters.
- Postage, delivery, and freight costs.
- Printing, copying, and fax charges.
- Rent of equipment and storage
- Travel for business, including costs to go to seminars and conferences. Deductible travel costs include hotels, airfare, taxis, car rentals, tips, and so on. These expenses are 100% deductible. Travel meals are only 50% deductible.
- Each business is unique. Businesses may deduct any valid expense. Seek tax advice.
Myra B. Carlisle, CPA
Myra Carlisle & Company, PC
IRS Circular 230 Notice: If this e-mail contains tax advice, this written advice is not intended to be used, and cannot be used by anyone, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax provisions.