Small Business Tax Deductions

If you are self employed or run a small business there are many tax deductibles to help you cut income tax payments. The rules can be confusing, a mistake can cost you. You are entitled to take as many deductions as you can but keep in mind that the more questionable your deductions are the higher your chances of being audited. Keep good records and receipts; Keep a start up diary, phone logs, daily calendars, travel and entertainment logs, and mileage and toll notebooks. (the latter in your glove compartment.) Include names of clients, dates, and nature of transitions.

Deductible Expenses

1. Attorney for business affairs
2. Bank fees
3. Business cards
4. Bad debts, if you have already reported the debt as income or if you actually lent out money
5. Association fees
6. Advertising cost, including agency fees, printing costs, and giveaways
7. Accountant/bookkeeper fees for business finances
8. Computer and printer costs, including software, online services, and instructions related directly to business; If use is split between business and personal use you must keep a log of time used for business purposes and deduct only a percentage of the total cost
9. Courses taken to improve business skills, including training tapes
10. Public relations costs and fees
11. Office supplies, including paper, stationary, folders, pens, pencils, tape, envelopes and other materials
12. Employee salaries and wages
13. Car expenses including tolls, parking, and gas for business usage
14. Postage fees, including mail, supplies, and post office fees
15. Travel expenses, including transportation (car rental, bus or train costs, and airline tickets) meals, lodging, and entertainment
16. Licenses needed for operation of business
17. Pension Plan contributions
18. Interest on business loans and credit cards
19. Insurance fees for business
20. Office space costs, including rent, taxes, mortgage interest, and utilities, for home offices, the office spaces must be used exclusively for business purposes (including meeting with clients), and the deduction can only be a percentage of the total house costs based on the amount of space the office takes up in the house
21. Health Insurance premiums
22. Gifts to clients and associates
23. Entertainment for business purposes, including dinners, parties, and events for clients (usually only 80%decuctible)
24. Industry directories and listings
25. Magazines and journals for business
26. Consultant fees
27. Books used for business purposes