Anytime you are self employed or run a business you are able to take deductions against your income. Many new 1099 contractors or business owners end up leaving money on the table when they forget common deductions that they didn’t know could be a tax deduction.
With this article we hope to cut the guesswork out of getting the deductions you deserve. Keep in mind this is not meant to be an all inclusive list, but will serve as a good baseline for the most common deductions faced by many businesses.
Auto Expenses
- Auto Insurance
- Fuel (gas, diesel, or electricity if applicable)
- Annual maintenance
- *For questions about taking standard mileage vs. actual expenses – our reps will pick whichever is more beneficial for you on your tax return
Advertising
- Business Mailers (outgoing mail to current and prospective clients)
- Business Gifts
- Donations made in return for banners, flags, or recognition
- Stationery materials
- Business Cards
- Public Relations and Promotions
Insurance
- Malpractice Insurance
- Health Insurance
- Liability Insurance
Continuing Education
- College work (even post baccalaureate education)
- Continuing educational requirements for licensure
- Continuing Professional Education (CPE)
Meals
(business meals are 100% deductible in 2021 & 2022!)
- Cost of food while talking about business
- Meals for employees
- Cost of food gift cards used as gifts
Equipment, Furniture, and Office Equipment
- Leased equipment
- Finance charges related to financing
- Purchased equipment (may be subject to deprecation and not 100% deductible in year one)
- Office furniture
- Printers, Computers, and peripheral devices
- Laptops and tablets
Utilities
- Cell phone service
- Internet, fax, and voice services
- Equipment required for service
Parking and Tolls
- Parking and toll expenses related to your business travel
- Parking and toll expenses related to a client or prospective client
Bank Service Charges
- Overdraft fees
- Interest charges on credit cards, loans, lines or credit
- Most other transaction bank fees
Licenses
- License fees
- Expenses related to maintaining a required license
- Professional association dues
Subscriptions Services
- Email and website hosting
- Internet fax
- Office security suites
Retirement Contributions
- Retirement account setup, maintenance, and processing fees
- Retirement matches
- Employer matches
- SEP contributions
Uniforms
- Employee uniforms if required
- Specific work related clothing (scrubs, police uniforms, and other specific uniforms required)
Accounting, Bookkeeping, and Legal Fees
- Tax preparation fees
- Bookkeeping service fees
- Legal advice and advisory
- Consulting and business mentoring
Payroll
- Payroll setup, maintenance, and processing fees
- Payroll taxes
- Federal and state unemployment taxes
Summary
The list of business deductions above is not all inclusive. Each business will incur different types of expenses in the course of running their business that may help them lower their tax burden as it relates to their businesses. If you have any questions on the deductibility of certain expenses or need help filing your business return, be sure to reach out to Booked Financial for help.
* Some deductions are business structure specific and may not be available to all business types
* Expenses must be “ordinary and necessary” to be deductible.
* Specific states may have different deductions available to your business. If you are unsure of a deduction send us an email.
* Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter. Please contact us if you wish to have formal written advice on this matter.
For more information – get booked for a call with your Booked Financial Rep
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