![]() ![]() Itemize them under categories, so it’s easy to add them up. However, if you choose to deduct things that are coasting the line, keep in mind that excessive amounts might send up a red flag and increase the potential for audits.Ī good rule of thumb is to keep all receipts and invoices. The IRS leaves it up to you to decide what’s essential – in other words, there are no clear guidelines. But if your job depends on specific software, computers, or other tools, those are all deductible, as is a portion of your costs for housing, utilities, and internet. For example, if you work from home and don’t interface with the public, you probably can’t write off your wardrobe or dry cleaning. ![]() What counts as a business expense varies on a case-by-case basis. Knowing what tax deductions are available to you saves you money and frustration – and since many of us have recently switched to working from home, there are a few items you might not even realize you can deduct. Running your own business provides tons of freedom and flexibility, but let’s face it: managing taxes can be a pain! You should consult with a licensed professional for advice concerning your specific situation.įorbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms.With April around the corner, tax season is officially in full swing. The information provided here is not investment, tax or financial advice. Don’t cheat yourself, use this information to minimize your taxes and maximize your income. This keeps it from becoming overwhelming, and you may even get more business expenses written off than you ever thought before. It’s easier to track it when you do it once a month. You’re going to categorize your expenses as you go because when it’s time to file your taxes, you’re 365 days later, you’re not going to remember. If you have business travel, you’re going to write that down. ![]() You’re going to write down who, what, when, where and how for that meal. If you have a meal written down, you’re going to write down meals. That means at the end of every month you’re going to take one day and you’re going to go through your credit cards, you’re going to go through your debit cards, you’re going to go through your check account, your bank account, and you’re going to look for your business expenses. My number one strategy for making sure you don’t overlook your business expenses is to manage them all year. Because you’re going to need a log to make sure you can support your business travel. They want to know things like “So why did you take that business trip?” “How was it going to help your business?” “Who did you visit?” Document, document, document. You have to make sure you document it because this is one of those areas that IRS requires great documentation. You want to make sure that you’re doing something on the front of the trip, the middle of the trip and the end of the trip, so you’re getting that business-related travel written off. When you are traveling, it’s important to have the mindset beforehand of how you can make the travel a business write-off. Of course, if you are going to church every Sunday and you are tithing, you’re going to get your statement right? What about all the other things that we are doing while we are making payments to nonprofits? What about the dues we pay for our kids to play football? Is any of that a write-off? What about cleaning out your garage, cleaning out your cars and, instead of throwing stuff in the trash, taking those things to a homeless shelter, Goodwill or another type of nonprofit organization that accepts our used goods? Consider all of your charitable contributions, and get your receipts so you can maximize your deduction. ![]() If you are doing a “lunch and learn,” or if you are having business meals online with somebody by Zoom and they’re not necessarily in person, do not think for one second that you cannot take that as a business write-off because you very likely can. These days, we also have a lot of meetings online with Zoom or similar tools. And when audits occur, they can be years and years later, making it even less likely you remember if you wait. It’s important to do it right away because you won’t remember a year or two down the road or when it comes time to get your taxes done. You need to make sure that you keep track of that receipt as soon as you get it, flip that receipt over and write on that receipt who you met with, why you met with them and what you were talking about. When you are going out to dinner or going out to lunch, you want to make sure that if you’re going to be talking business with people and if you are a business owner, you are keeping records of those meals. ![]()
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