Small Business Tax Write-Offs You Need to Know About

Carrie Hinkel — Mon, 29 Oct 2007 19:54:16 +0000

With the end of the year fast approaching, you may be thinking ahead to taxes and what small business write-offs you can use to your advantage. Most likely you know about the most obvious ones (like business computers and equipment), but there are plenty of other deductions you may not know about. The only way you can use business write-offs to your advantage is if you actually know about them. Here’s a list of several that are commonly overlooked by business owners:

Unpaid invoices - You can claim any non-payment from customers as a loss on your taxes. If you have unpaid invoices from years past, don’t worry, you don’t have to take the deduction the year it occurred. So gather up your old paperwork and go ahead and deduct them on this year’s return.

Mileage - You may have heard about this deduction, but are you keeping track? All those short trips to the bank, post office, restaurants and airport add up big time over the course of 365 days. If you start doing it, you will be amazed at how much money you’ll be able to write off. At a 32-cent deduction per mile, these add up very quickly and at the end of the year, it is a real eye-opener to see how much you’re able to write off. Oh, don’t forget tolls either!

Shipping and postage expenses - This is another often-overlooked deduction. Once you see how much everything adds up to, you’ll gladly take that deduction every year!

Your home - If your house is also your place of business you have the right to depreciate a percentage of the home’s total square footage depending on the percentage of your home that is used exclusively for your business.

Utilities - Do you have electricity, gas, phone, etc.? Up to a third of these can be deductible.

Cell phone / PDA bills - If you are using your cell phone/PDA for keeping in contact with business associates, then the cost off your phone and your monthly bills are a deduction.

Business Meals - Any time that you go out for meals or drinks and discuss business with someone (even your spouse) then you can deduct that meal as a business expense. Be sure to deduct the miles it took to drive there and back too!

Travel Expenses - Any time to you travel with the purpose of maintaining or expanding your business (i.e. trade shows, client visits, etc.), the expenses associated with that are deductible. That means hotels, airfare, meals, rental car, etc.

Of course, in all the above cases, you must keep complete records if you are to qualify for the tax deductions. That means receipts or detailed entries (depending on the deduction). Generally, all expenses incurred while maintaining or expanding your business are deemed as tax deductible. To make sure you are getting the proper deductions for your business, talk to a qualified accountant or visit the IRS website at http://www.irs.gov .

goWholesale » irs.gov

Small Business Tax Write-Offs You Need to Know About