So you have a small business and you are spending money for your company and investing in yourself everyday but you aren't quiet sure exactly what expenses are deductible and what are not? I've put together a list and examples of nearly 100 Write-Offs and the few things you Can't Write-Off that may be useful to our everyday business owner.
First off, What is a Tax Write-Off?
A Tax Write-Off is an expense that one can deduct from their Taxable Income
On their Tax Return. The IRS Says an expense must be "legitimate and necessary"
In order to be deducted. Meaning you need to always keep proof whether you take pics of receipts or use QuickBooks you have to prove it somehow and it needs to make sense for your situation. If it makes sense and you have some kind of proof that expense the IRS cannot tell you it doesn't. Write-Offs can add up to a HUGE reduction in the amount of taxes you may have needed to pay the IRS.
As with anything dealing with the government and the IRS ("The Man Himself") you have got to be careful when making your decisions. There are so many laws and penalties surrounding them. Tax Write-Offs aren't something to fabricate just to get out of paying taxes. A small business could commit Tax Evasion a number of ways one example is taking tax deductions for personal expenses on your business taxes . The IRS calls this "Cheating" which is a felony. If found guilty you could face up to five years in prison, a fine of up to $250,000 and still have to pay the correct amount of taxes owed as well as your own legal fees.
So It's Good to know what you Can vs. Cannot when it comes to Write-Offs
Because being unware can lead to you overpaying taxes.
Here is a list of common small business write-offs.
Accounting Services
-(If you use me for Taxes or any other service you can deduct the cost.)
Advertising and Promotion
-If you are Buying Business Cards, or Flyers, Paying for ads to run on any Social media ,Paying Influencers for promo etc it’s all deductible)
Auto and Truck Expenses
-IF you use your car and the usage is directly related to your business you can write off all expenses related to the vehicle (New Tires, insurance, Oil Changes, Repairs etc)
Bank Service Charges
-If you have a Business bank account any ATM Fees or Account Set up or Account Maintenance Fees those can also be deducted.
Business Gifts
-If you give your clients and gifts or give a gift on behalf of your business its deductible up to $25 per person.
Business Related Training Seminars and Sessions
-If you take any class or online course any additional training sessions, ANYTHING to further your education to help you grow your business its deductible.
Casualty and Theft Losses
-If someone steals your merchandise or they claim fraud and you have proof you delivered said item its deductible
Certain Bad Debts
Certain Charitable Contributions
Child Labor
-If your children work for your company you can write off the amount you paid them.
Consulting Fees
-If you go see a business consultant or consult anyone as a paid service and it was in reference to your business or how to make you better for your business its deductible.
Contract Labor
-Any Contract Labor pertaining to business depending on type of business .
Depreciation of Assets
-If you have a Work Vehicle that being used , or computers, tools furniture and work equipment that’s being worn down by your business you can deduct the depreciation of the asset by filing IRS form 4562
Educational Expenses
Equipment Rental or Lease
-If for any reason you have to rent any equipment whether its tools or backdrops or cameras etc its all a write-off as well as anything that leased and directly related to business.
Freight and Delivery Charges
-Only if your company requires you to ship using freight services and you pay them out of pocket as well as any out of pocket delivery expenses.
Guard Dog
-If the dog is on site protecting your inventory , the cost to keep an maintain the dog are deductible.
Healthcare Costs
Home Office Deductions
-You can do this by estimating your offices overall square footage. Multiply that percent by your rent, mortgage and utility bills to calculate the amount you can deduct from your income or use the simplified method which calculates out to $5 per SqFt of office space.
Hiring a Lawyer for a criminal issue related to your business
Incidentals on a Business Trip
Installing an Athletic Facility
-As long as an employee runs it, its on the business' premises and its used by employees majority of the time.
Insurance Expenses
-Building, equipment, liability, workman's comp ,Errors & Omissions Insurance
Interest Expenses
Internet
Janitorial Services
Licenses and Regulatory Fees
Marketing Expenses
Meals and Entertainment
-As long as its directly related to your business, or if you take a client out to eat to sign a contract or just speaking abut your business during the meal in general.
Moving Expenses
-If you had to move for your business or your business moves locations during that tax year.
Music, Stereo Equipment
-If you play soft music to help employees be productive and/or to make a creative , comfortable work environment.
Office Supplies
Outplacement services for your employees
Payroll Processing
Penalties and fines paid for late performance or nonperformance of contracts.
Permits and Fees
Postage
Professional Fees
Recruiting Expenses
Rent Expenses
Repairs and Maintenance
-If you paid for any machine repairs or maintenance cost on tools you use for work or you paid for your office to be repainted, had to get a broken compute fixed? All of these kind of cost like these can be deducted.
Salaries and Wages for Employees
Smartphones and Tablet
-Used Majorly for business.
Social Security
Software Expenses
Subscriptions
Supplies in General
-Some of us are just self-employed or working for cash doing hair, Cleaning houses, baby sitting, dancing etc. ANYTHING you buy that will be used directly for the earning of income toward your business can be written off.
Taxes--- Payroll, local, city and country property taxes; foreign taxes paid.
Telephone Charges
-If your business has Landlines or Wireless Business Lines they are both a deductible expense
Travel
-Related to the conduct and operation of your business.
Uniforms
Utilities
Waste/Trash Removal
Things Small Business' CANNOT Write-Off.
A Small Business Loan
-BUT what you purchase with the loan CAN be written off.
(Backwards , I know.)
Business Attire that can double as street or evening attire.
-MUST be BUSINESS ONLY ATTIRE.
Charitable Contributions of your time.
-Come on Guys. Don’t Volunteer your TIME with hopes to some how deduct it.
Dues you pay to be a member of something , even if your membership is for business
-WEIRD. Yes. I assume its because you're paying the dues on behalf of yourself and you would be personally attending and reaping benefits of membership.. Its another backwards tax law because what if the things you're learning or doing are things that will allow you to help build and make your business better.. Exactly this is one of those funny IRS things the people aren't meant to get.
Federal Income Tax Payments
Life and Disability insurance premiums paid for yourself if you are a sole proprietorship, partnership or S Corp.
Lobbying Expenses
Penalties and Fines you pay when breaking the law.
Political Contributions.
Professional Accreditation fees
The Salary you pay yourself as a sole proprietor.
Using this Information I want you guys to make sure you all are taking all the deduction that your business is entitled to. It will end up saving you so much money in the long run. And then thank me later.
Thanks for Reading ,
Diamond Maragh
If you have any Questions or Need help with anything concerning your small business feel free to reach out.
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