Syndicated with permission from The Young Entrepreneur Council (YEC)
Question: Doing my business taxes, what’s one thing that entrepreneurs often overlook that can be included as a write off?
“It’s easy to toss receipts with online banking but save your meal receipts after dining with colleagues or clients! Write on the slip who attended and what business was discussed and let your accountant do the rest.”
“A lot of entrepreneurs don’t think about including their cell phone as a write off because often because they lend themselves to personal use; however, if you (or your employees) use your cell phone for business, use you can typically write it off directly.”
“The costs associated with starting up a business—like incorporation paperwork and preliminary legal fees—can be written off. Make sure to keep all your receipts or invoices from lawyers for tax season.”
PORTION OF YOUR MORTGAGE?
“If you are running your business out of your home, you can deduct a portion of your rent or mortgage. This goes for utilities as well!”
DRIVE TO WORK? WRITE OFF GAS
“A lot of entrepreneurs are workaholics. This means that everyday of their lives consists of a drive to and from the office. If this applies to you, you can write off a great deal of your car’s costs, including gas and any type of service you receive. “
CABS AND PUBLIC TRANSPORATION
“All cabs and public transportation taken to and from meetings, business dinners, etc. can and should be taken as write offs!”
WRITE OFF YOUR RENT
“If you are renting a place to live and use that space—even for part of the time—for business, you can write off a portion of your rent expense. Come up with a percentage of time or space that your rented living arrangement supports your business, and write it off. “
RETIREMENT PLAN COSTS AND CONTRIBUTIONS
“An entrepreneur has a tendency to focus on the here and now, and retirement can seem so far away. However, planning for retirement can provide immediate benefits in terms of a tax deduction. Whether setting up a plan for your growing employee base or just yourself, speak to your accountant about the specific deductions you’re eligible for.”
“Do you use your car to travel for industry events, client meetings or sales visits? If so, you are eligible to write off a portion of the car payment—or in some cases, the entire payment, depending on the amount of business usage of the vehicle. “
“Almost all companies have products and services that can benefit their local communities. When you have some extra product or find a worthwhile cause, definitely donate your product. You can take a tax deduction for the cost of the goods, and help folks in need at the same time—a double win.”
WRITE OFF YOUR CPA!
“The cost of getting your taxes done by a CPA is a necessary part of doing business—and provided you get a good one, definitely worth the cost. I write off perhaps $500 a year for someone who finds me thousands of dollars of other deductions. If you’ve got a great CPA, he or she will even prompt you to think about unusual opportunities for deductions.”
“When you travel for business, you can deduct many expenses, including the cost of plane fare, rental cars, lodging, meals, telephone calls, and even tips. If the trip includes business and pleasure, it’s okay as long as the “business” is your primary reason for the trip. “
SECTION 179 DEDUCTION
“As part of the “American Recovery and Reinvestment Act” US companies that acquired assets in 2011 are eligible for up to $500,000 in deductions for assets purchased or leased. This even includes off-the-shelf software—an often overlooked expense! Be sure to also check out the healthcare tax credit if you pay 50 percent or more of your employees’ health insurance premiums.”