10 Common Deductible Business Expenses

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One of the most important aspects of running a business is related to taxes. You need to be aware which taxes to pay and when they are due. It can be overwhelming, but planning ahead can help you file on time and claim the right deductions.

One of the easiest ways to reduce your income tax bill is to make sure you’re claiming all of the tax deductions available to your small business.

Here you will find 10 of the most common…

01- Legal and Professional Fees

You have the right to an attorney –and the right to deduct any legal and accounting fees charged by attorneys and accountants, consulting and other professionals that are related to your business operations.

02- Business insurance

You can deduct the premiums you pay for business insurance. This may include…

• Flood insurance
• Credit insurance
• Car insurance on a business vehicle or business liability insurance
• Property coverage for your furniture, equipment, and buildings
• Liability coverage
• Group health, dental and vision insurance for employees

03- Education

Did you attend any seminars, workshops or classes in the past year that were designed to help you improve your job skills? Your work-related educational expenses may be deductible, especially if they’re required to keep up or renew a professional license. Remember, they have to be work-related.

04- Salaries and Employee Benefits

If you have employees, what you pay them—from salaries and wages to bonuses and commissions—are tax-deductible business expenses. You can also deduct contributions to their retirement plans, education assistance and most other employee benefit program costs.

05- Meals

Meals with a business purpose that meet the IRS definition are deductible at 50%. The meal cannot be lavish or extravagant under the circumstances. You have to keep the receipts. You can also deduct 50% of the cost of providing meals to employees, such as buying pizza for dinner when your team is working late. Meals provided at office parties and picnics are 100% deductible. The lunch you eat alone at your desk is not tax deductible.

06- Office Equipment & Supplies

You can write off office supplies including printers, paper, pens, ink, furniture, computers and work-related software, as long as you use them for business purposes within the year in which they were purchased. You can also deduct work-related postage and shipping costs. Be sure to file all receipts for office supply purchases, for documentation.

07- Office Overhead

Everything you spend on utility bills for your business—including rent, electricity, phone, Internet, water, heat and sewage—is fully deductible.

08- Work-related Travel Expenses

All expenses related to business travel can be written off at tax time, including airfare, hotels, rental car expenses, tips, dry cleaning, meals and more. You can reference the IRS website for a full list of deductible business travel expenses. To qualify as work-related travel, your trip must meet the following conditions:

• The trip must be necessary to your business.
• The trip must take you away from your tax home, i.e. the city or area in which your company conducts its business.
• You must be travelling away from your tax home for longer than a normal work day and it must require you to sleep or rest on route.

09- Business interest and bank fees

If you borrow money to fund your business activities, the bank will charge you interest on the loan. Come tax season, you can deduct the interest charged both on business loans and business credit cards. You can also write off any fees and additional charges on your business bank account and credit card, such as monthly service fees and any annual credit card fees.

Also, review your bank statement to see if you are being charged for operating your business accounts. If the answer is “yes,” then you’ve found another deduction.

10- Advertising and Marketing

Advertisement or any form of promotion should be taken into account at tax time. If you send out free samples of your product, that’s a deductible cost of promotion. So is hiring someone to write your press releases or leaflet the neighborhood. No matter the type, the cost of advertising and promotion is 100% deductible. This can include things like:

• Graphic design
• Printing
• Ad space in print or online media
• Design and develop of your website
• Social Media
• Sponsoring events
• TV commercials
• Website expenses
• Business cards
• Promotional material
• Marketing Campaigns
and more.

C O N C L U S I O N:

Whether you’re filing your taxes quarterly or holding off for the next annual deadline, you should begin preparing for your taxes by keeping records of your expenses as of January of each year. Make sure to document each of these small business tax deductions by keeping physical receipts and writing down the business reason for the expense on your receipts as soon as you receive it. In this article, we have prepared a Tax Preparation Checklist that can be very helpful for you.

With this comprehensive list of small business tax deductions, you’ll be well on your way to saving on your taxes this year. However, deductions can be tricky, it’s always best to consult a tax expert for any questions that might arise to ensure you are complying with all regulation and avoid any penalties.

Luis Federico Peña

It's a Social Media and digital marketing consultant and owner and founder of LFStudio.com. He is also author and entrepreneur. He helps small businesses to grow, get clients and generate income.