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Business Owners & What You Should Know

We make your business our business

Understanding what is deductible and what is not deductible can cause sleepless nights for any business owner. Whether you own the small craft business around the corner, or the repair shop in the next town, business taxes are stressful.  Here is your guide to better understand what expenses are deductible and can help lower your taxable net income. Always remember, record keeping and receipt saving are both key to completing a successful income tax return for any business.

Income Tracking

Calculator

We have all heard the term "cash under the table"...literally meaning receiving cash as payment in order to avoid claiming that as income for your business.  Contrary to popular belief, this is not an acceptable practice for any reputable business to maintain.  Cash payments should be counted along with check payments and credit or debit payments.  Risking an audit of your business because cash receipts were not claimed can get your business penalized, which is very serious. So please, claiming all income is as important as claiming all allowed deductions from that income.

Cash receipts are income too!

Common Expenses

  • Supplies used as inventory

  • Office supplies

  • Inventory

  • Equipment

  • Tools

  • Uniforms or safety equipment

  • Cleaning supplies

  • Office space rent or lease payments

  • Utilities (electric, gas, water, trash services, internet)

  • Business telephone or cell phone

  • Business insurance

  • Repairs and maintenance  expenses

  • Postage, shipping, delivery fees

Checklist labeled "Business-related Tax Deductible Expenses"

Less Known Expenses

Stack of bills with calculator and money

Some expenses are not as well known or understood:

  • Advertising

  • Unpaid invoices (bad debts owed to the business)

  • Bank or finance charges (on bank accounts or credit card accounts)

  • Transportation rental fees (cabs, bus fare, rental vehicles)

  • Commissions or fees paid by the business

  • Subscriptions, dues, publications

  • Employee benefit programs (medical or retirement benefits)

  • Gifts (with limitations)

  • Health insurance of the business owners

  • Interest expense on loans or other business debts

  • Legal or professional fees (lawyer, accountant, landscaping, etc)

  • Travel , lodging, entertainment, and business meals (limitations apply)

  • Wages paid and payroll taxes

  • Sales and property taxes

  • License and permits

  • Required continuing education and licensing requirements

  • Business use of your home (if applicable)

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