Working with small to medium-sized business owners all year, the most frequently asked question we hear is, “Can I deduct that?”
Running a business is an expensive undertaking and the old adage is true, “It takes money to make money.” Legitimate tax write-offs are critical to growing your business and maximizing your company’s bottom line.
Because they are dealing with a government agency known for its attention to minutiae, it usually comes as a shock to entrepreneurs when they learn that the IRS doesn’t offer a standardized check-list of approved business deductions. The principal guideline the IRS uses is: you can deduct any expense incurred in the production of income.
Even if you’ve been in business for years and are conditioned to considering the tax implications of every purchase, it’s always a good idea to discuss your expenditures with your CPA or tax advisor to make sure you’re not overlooking anything.
Especially since 2018 is the first year we’re working with the Tax Cuts and Jobs Act. we urge all our clients to keep track of all their business-related expenses and discuss them with us to make sure everything is handled and reported correctly.
While the following is not an exhaustive list of every imaginable business-related expense, you can use it as a thought-starter to review the money you spent during the year, so your business could generate income.
Not every item on the following list will be tax deductible this year—or may be only fractionally deductible—but we urge our clients to give us the details of these expenses (and any others you feel fit the broad criteria) to see whether they qualify to reduce your taxable income.
Building repairs and maintenance
Business association membership dues
Charitable deductions (business)
Computers and tech supplies
Conventions and trade shows
Costs of goods sold
Credit card convenience fees
Dining during business travel
Discounts to customers
Employee education and training
Entertainment for customers and clients
Freight or shipping costs
Furniture or fixtures
Internet hosting and services
Investment advice and fees
Losses due to theft
Mortgage interest on business property
Newspapers and magazines
Office supplies and expenses
Parking and tolls
Real estate-related expenses
Research and development
Software and online services
Workers’ compensation insurance
And, remember: the more documentation you have regarding expenses, the stronger your claims for legitimate deductions.