10 Apr Tax Planning: Business Expenses to Write Off
Tax Planning: What Can I Deduct for Business Expenses?
If you find yourself spending a lot of money on business expenses, you should definitely be writing those expenses off. By doing so, you won’t have to pay as much income tax on your taxable income. That means that, come tax season, you may get a bigger return or owe less. The important thing is to make sure you’re keeping good track of your records, so you can give them to your tax professional when it’s time to file. Good tax planning is the best way to make tax season easier, and today we’ll be talking about what you can write off for your business expenses.
What Qualifies as a Business Expense?
The two biggest stipulations for a deductible business expense are that it has to be both ordinary and necessary. But what does that mean?
Ordinary – Ordinary means that the expense is something that is commonly associated with your profession. For example, you would need office supplies if you’re working in an office. If you have to buy these supplies to help you do your job, you can write it off.
Necessary – The expense has to help your business in some way, no matter how minor.
There’s actually quite a bit of leeway here, really if the expense is something that you use for business and it helps you perform your job better, it can be considered deductible.
Are There Any Limits?
For the most part, you’re not really limited in how many business expense deductions you can write off when tax planning. As long as the number seems reasonable, then you can write it off. But, if your deductibles are more than your income, that wouldn’t be seen as reasonable, and all of your write-offs couldn’t be included. For instance, if you’re a car dealer, you can put some money toward advertisements to market yourself. The money used for advertisements can be included in your business expenses. But if you’re buying a bunch of TV spots and not seeing any returns, you may run into some issues. Now you’re spending more than you’re making, and you won’t be able to include all of those expenses on your taxes.
Common Business Deductions
To give you a better idea of what deductions to record while tax planning, we’ve listed some of the most common business deductions:
- Travel expenses
- Business meals
- Office Supplies
- Software and Computers
- Much more
We could list many more business deductions, but the safest thing to do is just consult with a tax planning expert to figure out which of your expenses are deductible.
Contact a Tax Planning Expert Today
Make tax season easier and never worry about tax planning on your own again when you hire Jeff Pickering, CPA. Not only will we be able to take care of your taxes come tax season, we can advise you on any tax-related issues throughout the year. Contact Jeff Pickering, CPA for more information or for any questions you might have.