Business Owners and 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
Cash receipts are income too!
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 for tax evasion which is very serious. So please, claiming all income is as important as claiming all allowed deductions from that income.
Common Expenses
Some things we all know are deductible to a business:
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
Less Known Expenses
Some expenses are not as commonly 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)