List of expenses that are deductible for businesses

If you own a business, it is important to know what expenses can be deducted against your income to minimize the income tax you pay. This is a list of the most common allowable items. All expenditures must be supported by a receipt and proof of payments. These apply only to businesses and not to employees. As of 2018, employees cannot deduct business expenses on their personal tax returns. Contact my office is you have a question or need further clarification.

  • Advertising
  • Books, newspapers subscriptions, magazine subscriptions and any other publication that directly furthers your knowledge about or enhances your particular business.
  • Dues paid to professional organizations that enhance or promote your business in the community.
  • Licenses paid to governmental agencies or groups that regulate your industry.
  • Educational seminars and classes as long as you are improving your knowledge and not qualifying for a new career.
  • Research and reference costs and materials.
  • Equipment such as computers, printers, etc… that is necessary to conduct your business.
  • Office supplies and tools needed to work.
  • Office rent including utilities, internet fees, insurance, and maintenance.
  • Travel incurred to meet with a client or potential client, attend an educational class, or meet with a business associate if it related to the operation of your business. This includes airfare, rental cars or local transportation, and hotels. Meals are not included in this category.
  • Meals are only deductible at 50% of the cost incurred. The meals must be with a client, potential client, or a legitimate business associate for the purpose of discussing business. Meals incurred while travelling for business are also 50% deductible.
  • Entertainment costs are not deductible. These include sporting event tickets, concerts, golf fees, and theatre tickets.
  • Gifts are only deductible up to $25 per recipient.
  • Postage and shipping.
  • Professional fees such as legal, accountant, coaching, and advisory.
  • Wages, payroll taxes, and employee benefits.
  • Subcontractor fees paid.
  • Auto expenses as long as the usage of the vehicle is for business miles driven and not for personal usage. You are required to keep a mileage log to determine this split.
  • Telephone costs.
  • Taxes imposed by state and local governments.

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