WHAT CAN BE DEDUCTED AS BUSINESS EXPENSES?

WHAT CAN BE DEDUCTED AS BUSINESS EXPENSES?

If you are hoping to start a business or you are already in business, it's full-time or an
additional stream to your current income, maximizing and understanding your deductions can help you keep more of your hard-earned money.

According to the IRS, Business expenses are the costs of carrying on a trade or business, andthey are usually deductible if the business is operated to make profit.
For a business expense to be deductible, it must be both ordinary and necessary.

● An ordinary expense is one that is common and accepted in your industry.
● A necessary expense is one that is helpful and appropriate for your business.

So, an expense does not have to be indispensable to be considered necessary.
Even though an expense may be ordinary and necessary, you may not be allowed to deduct the expense in the year it has been paid or incurred. And in some cases, you may not be allowed to deduct the expense at all.

Below are some of the common business expenses that may be partially or fully tax deductible:

• Advertising and marketing
• Bank fees and interests

• Business bad debt
• Bookkeeping fees
• Business meals
• Business travel expenses
• Business vehicle
• Commissions & fees
• Contract labor (Freelancers and Contractors)
• Credit card interest
• Education (Coaching or Mentorship)
• Employee benefit programs
• Employee education plans
• Employee retirement plans
• Employee salaries and wages
• Equipment purchased
• Equipment rental
• Executive compensation
• Furniture
• Insurance expenses
• Legal fees
• Loan interest
• Membership
• Moving expenses
• Janitorial services
• Office equipment
• Office supplies
• Payroll for employees

• Repair and maintenance costs
• Rent
• Shipping cost
• Software
• Subscriptions
• Utilities

If you use your own vehicle and/or your mobile phone for business and personal use, IRS allows you to deduct the business portion of gas, maintenance, insurance, repairs and phone bills, as long as the mileage is tracked and/or you can prove the calls made and/or received for the business.

For more information regarding deductions, tax planning, bookkeeping and tax preparation, feel free to send us an email via:

contact@savvysavingsgroup.com or text to 860-968-6060