Possible Deductions

Business owners can make many deductions for their expenses. Below are a few of the most common deductions, but these are certainly not all the deductions business owners can make.

Rent Expenses

Most businesses can deduct their rent expenses if they rent the place where they conduct business or they rent their home when they conduct business from a home office. Note that you can only deduct the percentage of rent that applies to your home office. Also, a desk in your bedroom does not count as an office (i.e. your office cannot be apart of your living space).

Utilities

Business owners can also deduct utilities needed to run the business. These most commonly include water, gas, electricity, phone, and trash. Even if you have a home office you can still deduct the percentage of utilities used towards that office. Moreover, if your phone is for business and personal it can also be partially deducted from the business portion.

Repairs

If your office needs a repair you can deduct that too. Even in-home offices can use this deduction, but only if it applies to the actual office.

Office Supplies/Equipment/Software

Any supplies, equipment or software you use for your business can be deducted too. Some examples of office supplies are paper, pens, etc. Some examples of equipment include computers, printers, etc. Lastly, any software used for your business is also deductible (e.g. online accounting or payroll software used for business).

What May no Longer be Deductible

Meals and Entertainment

Since the new tax law, there has been much confusion over whether business owners can or cannot deduct meals and entertainment. The AICPA has demanded answers from the US Treasury as well as the IRS. Tax writers from the House and Senate have acknowledged the AICPA’s concerns and reassured that fixes will be made. But, as of now, it is left up to interpretation whether or not the deduction stands.

Links

Read Mike Kappel’s whole article on allBusiness.

Learn more about business meal deductions from Amanda Becker’s article.

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