As a business owner, it’s essential to know what expenses are business tax-deductible. Otherwise, you risk paying more in taxes than necessary or potentially getting into trouble with the IRS for taking inappropriate deductions. Here are some tax-deductible expenses every business owner should know about.
⦁ Utilities
If there’s a utility that you use solely for your business, it’s completely tax-deductible. For utilities that you use for business and personal use in your home, you may deduct a portion of the cost that’s based on how much of the utility your business uses.
⦁ Office Supplies
Any supplies that you use for your business, like paper, writing implements, staples, or glue, are tax-deductible. This also includes cleaning supplies that you use for business reasons.
⦁ Office Furniture
Furniture that you purchase to set up an office or use during your business’s operations is a business tax deductible expense that can add up quickly.
⦁ Software Subscriptions
If you have a software subscription for a program or app that your business uses, this is a qualifying tax deduction.
⦁ Advertising and Marketing Costs
Money that you spend to market or advertise your company is a deductible business expense. This applies regardless of the type of marketing you used for your business; expenses for social media advertising are also deductible.
⦁ Interest for a Business Loan
Money that you borrow will usually require some type of interest payment. As long as you borrow the money from an actual lender (not a friend or family member), the amount of the interest is tax deductible.
⦁ Bad Debts
Have a customer or vendor who never paid their invoice? As long as you can prove the debt was business-related, you can deduct money you’ve lent that wasn’t repaid.
⦁ Taxes
As a business owner, you likely pay local, state, and federal taxes. These taxes qualify as a tax deduction.
⦁ Payments to Employees or Contracted Laborers
Wages that you pay to employees or payments you make to freelancers or independent contractors are a business tax deduction.
⦁ Professional or Legal Fees
If you’ve used an accountant or lawyer for your business, these fees qualify as a deductible business expense.
⦁ Auto Expenses
Use your car for business purposes? Keep track of your travels because you can deduct the standard IRS mileage rate for each mile that you drive.
Or you can deduct expenses specifically for the business use of your vehicle.
⦁ Insurance Expenses
Any premiums that you’ve paid for insurance for your business are a tax-deductible expense.
⦁ Bank Fees
Bank fees that you’ve paid for your business accounts, like overdraft fees, ATM fees, check printing fees, or payment processing fees, are deductible businesses expenses.
Need more guidance about what expenses are tax-deductible for your business? Contact Gurian CPA Firm today!
