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Rule One: More is Less
The large majority of ordinary business expenses are deductible on your tax return. So the MORE organized and comprehensive your accounting is, the LESS stress (and hopefully, taxes) you'll have come March. It's just one of the many ways that a dedicated accountant can save you money, time, and trouble.
But let's suppose you're a team of one, or you're just getting started and want to do it yourself. Stick around...
Photo by Alexander Grey on Unsplash
Deductions: A Non-comprehensive List
- Advertising and marketing
- Automobile expenses (vehicle purchase, fuel, repairs, etc.)
- Bad debts
- Bank charges
- Continuing education and training
- Depreciation
- Dues and subscriptions
- Employee benefits
- Insurance
- Interest
- Job supplies
- Legal and professional fees (includes accouting, tax, legal representation, etc.)
- Licenses and permits
- Office expenses
- Payroll (for employees, don't forget to record payroll tax separately)
- Rent (for property or equipment)
- Repairs and maintenance
- Software
- Taxes and licenses
- Business travel
- Utilities (telephone, gas, electricity, water, waste)
And much more!
Exceptions to the Rule
- Expenses for business entertainment are nondeductible. This includes the cost of renting facilities or dues paid to clubs hosting the entertainment.
- Buness meals are only deductible for 50% of their value. The exception is food and beverages at recreational or social events meant for company employees (e.g., a company BBQ): such expenses are 100% deductible.
- Fines and penalties (e.g., parking tickets, late tax penalties) are nondeductible.
- Personal expenses paid for by the company card are nondeductible.
What do you think? Not too bad, right?
If you'd like some help managing your books, why not contact us for a free quote on our accounting services?