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.
This list is for business owners. It is not applicable for employees.
- 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.
- No longer deductible beginning in tax years 2018: Entertainment
- Business meals: Beginning in tax years 2018, business meals must meet strict criteria to be deductible. The allowance for meals provided for employees for the convenience of the employer is restricted. This is a complex issue. Retain receipts for meals and document the who, what, when, where & why. Provide the receipts and supporting information with your tax items.
- Gifts to business associates or clients (up to $50 per person per year is deductible). Be cautious here. Don't include entertainment of any kind as a 'gift'.
- 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
- 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. Entertainment expense incurred while traveling, or at any time, is not deductible for 2018. Meals incurred while traveling are deductible if tax provisions are met. Seek tax advice.
- Social dues and any/all entertainment activities are no longer deductible under the TCJA of 2018.
- Each business is unique. Businesses may deduct any valid expense. Seek tax advice. Tax legislation changes continously. This site may not include pending legislation.
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.