When tax season rolls around, be sure to consider these 10 often-overlooked deductions that your business can take advantage of.
1. Bank Fees.
Many businesses overlook this deduction come tax time. If you pay a lot of fees with your PayPal or bank account, start keeping track, because you can deduct them.
2. Food and Groceries.
If you bought food for clients, you can deduct the expense. In addition, if you require an employee to work more than ten hours in a day, you can write off that employee’s dinner as well. As an entrepreneur, though, you can’t write off your own meal.
3. Dining Out.
You can deduct your dining costs if you discussed business at the meal and documented it. In that case, it’s considered “meals and entertainment” and you can deduct 50%.
4. Travel, Meals, Entertainment, and Gifts
If you travel for business, you can deduct hotel fees, airfare, train tickets, bellboy tips, dry cleaning, rental cars, and more. All your travel costs are 100% deductible except for dining out (you can only deduct half of your meal costs while traveling).
5. Home Office.
Some business owners think that deducting a home office is basically inviting the IRS to audit you, but that’s not true, as long as you follow the rules. You can only deduct a home office if the space is devoted to your business and nothing else.
6. Vacations.
Technically, you can deduct a vacation if there’s business intent in the trip. For example, if you go to Disney World for a conference and your family stays with you in the hotel room, you can deduct your own travel costs plus the cost of the room. You can’t, however, deduct your family’s Disney tickets.
7. Mileage.
If you travel for your business, keep track of the dates, mileage, tolls, and parking costs associated with your trips. If you lease your vehicle you can also add in your lease payments, just as you can factor in the interest on your loan and depreciation on your vehicle if you are buying the car. Just keep in mind that if your business is not home-based, you can’t actually deduct your drive to and from the office. Your deductible mileage starts at your first business-related destination and ends at the last one.
8. Office Supplies.
Office supplies like computers, cameras, printers and printer supplies, pens and pencils, software, postage, web hosting, and other supplies and fees can all be deducted. Just be sure to save your receipts!
9. Moving Costs.
If you move for business-related reasons, you may be able to deduct some of your costs. However, your move must be at least 50 miles away from the address that is your “tax home,” and you have to live there for at least 39 weeks during your first year of employment (if you’re self-employed, it’s 78 weeks).
10. Phone Charges.
If you make calls for your business from home, you can deduct those expenses. When you get your phone bill, just be sure to circle your business-related calls so you can total them up. Remember, though, regular phone fees and charges won’t count toward your deduction unless you have a second line installed specifically for business use.
Chris Giorgio is the President of Fully Accountable. Fully Accountable is an outsourced accounting firm specializing in eCommerce and digital businesses. Chris has served as a CPA, CFO and has over 14 years of experience in the accounting and finance industry. Chris has dedicated his career towards helping entrepreneurs and high-level business owners achieve greater profitability through specialized outsource accounting functions.
