Here Are All The Expenses You Can Write Off When Filing Taxes
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Tax deductions can be a boon for businesses: The more expenses you can write off, the greater your net profit will be.
But be realistic about what is a true business expense. That lunch to court a new client? You can write off half of the check. Your trip to the tropics? Not deductible at all—unless you can show a legitimate business purpose for the trip.
And don’t try writing off travel costs for family members who tag along.
Here are some of the most ironclad business tax deductions:
Getting stiffed. If your business sells goods, those that customers receive but don’t pay for can be written off. If you run a service business, on the other hand, you’re out of luck. Remember to hang on to any documentation that will prove the goods were received, including e-mails between you and the deadbeat customer and transcripts of your phone calls.
Interest. The interest you pay when you borrow money to make purchases for your business is fully deductible. Remember, you must be able to prove that the credit was used for your business rather than personal
Education costs. If you invest in education that helps you maintain or improve skills associated with running your business, you can deduct the expenses. But this doesn’t apply if you’re learning skills that will enable you to jump to a different company.
Advertising and promotion. You can deduct everything from newspaper, television and radio advertisements to business cards to the sponsorship of the local Little League team—just make sure your company’s name is on those little jerseys.
Startup costs. These so-called capital expenses—everything from buying supplies to hiring consultants to doing advertising—can be written off once your company is open for business. Up to $10,000 is deductible your first year in business, and you can deduct the balance in equal amounts over the next 15 years.
Auto expenses. The simplest way to deduct the cost of owning (or leasing) and operating a vehicle is known as the standard-mileage-rate method. Keep track of the miles you drive on business, and then deduct 51 cents per mile (as of 2011). This method saves you the inconvenience of saving every filling station receipt. By the way, you can write off parking fees and tolls separately.Source: www.businessinsider.com