You should always be looking for things you can attribute to business expenses. There are many costs you will have that can be deducted from your business but here is an overview of the most common ones.
1. Starting your business
The costs that went into getting your business up and running like incorporation expenses can be deducted come tax time. You can deduct up to $5000 of these “capital expenses” for the first year and then remaining expenses have to be spread out over the coming years. These expenses can even include research expenses that went into starting the business.
2. Car expenses
If you drive at all for your business you can deduct that expense. Things like gas, tolls, parking and car depreciation can all be deducted. If you use your car for both business and personal use you can only deduct when you use it for business. This is where you have to keep track of things as no auditor will believe that you use your car %100 for business if you only own 1 vehicle.
3. Business entertainment
Did you take a client out to lunch? Did you hold a catered event at the office? If so you will be able to deduct parts of these events. Most likely you will be able to deduct %50 of these expenses.
4. Business travel
When you travel for business you can deduct just about everything. Plane fares, taxis, rental car, lodging, meals, faxes, phone calls, tips and more. As long as your trip is primarily for business you can mix with pleasure and even if you take someone not business related on the trip you can still deduct all of your own expenses.
Did you fund your business with credit or a loan? Any interest you take on or charges that you may have to pay on your credit card are tax deductible. Just keep clear records so you can show that the money is being used for business related activities.
6. New equipment
If you purchase equipment for your business it is all deductible. Think computers, office furniture, office supplies, and anything else you might purchase that allows you to do business.
7. Advertising and promotion
Anything you buy like business cards or an ad in a magazine can be written off. Also sponsoring things like your local youth soccer team can be deducted if you can show a clear connection to the business like the companies name in the teams name.
8. Education expenses
If you buy books, take seminars or attend conferences and events to learn about your industry you can deduct all of it. Anything you buy or participate in that helps improve or maintain your skills in your business can be seen as a business expense.
9. Home office
If you work from home you will be able to write off the portion of your home that you use for business. You have to calculate the percentage of home space that you use for business. This can even be a portion of a room that you have your desk setup in. Simple measure how much space your office area takes up and divide it by the square footage of the home. This is the percentage that you can deduct from rent, mortgage, utilities etc..
Just make sure the space is solely for business use. Even if you have a small apartment you won’t be able to claim a large percentage like %50 because you will be using the same space for personal use.
10. Freelancers and professional services
Did you hire a freelancer to do some work on a project or a website? You can deduct that expense. You can also deduct the fees from any professional work you get done from a lawyer, accountant or consultant.