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Don't Forget
These Tax Deductions
- Beginning January 1,
1999, the office-in-home deduction is available not only to those
who meet the old guidelines but also to self-employed people
who have no other location where they conduct substantial administrative
or management activities for their business.
© 1999,
by Jan Zobel, EA
As you gather your records
together in preparation of the April 15th tax deadline, you may
be wondering if you've overlooked any deductible business expenses.
Expenses can
be deducted if they are ordinary and necessary. Ordinary means
that someone else who has a business like yours would likely
have a similar expense. Necessary means that you needed to spend
this money in order to operate your business. In general, business
expenses are deductible if they are costs you wouldn't have had
if you didn't have your business. In other words, if you would
have had this expense, even if you didn't have your business,
it's probably nondeductible.
A list of common
deductible business expenses follows. You may have expenses,
unique to your business, that aren't on this list. If they are
ordinary and necessary for your business, they are deductible.
If, in reviewing
this list, you discover that you missed a number of these deductions
when preparing your tax return, consider filing an amended return
to claim those to which you're entitled. Remember, you must have
appropriate back-up materials (i.e. receipts and/or canceled
checks) in order to deduct these expenses on your tax return.
- Advertising
- Accounting and
bookkeeping fees
- Bank service
charges
- Car and truck
expenses
- Conferences
you've attended
- Contract labor,
including subcontractors and consultants
- Credit card
annual fees for cards used in your business
- Depreciation
on business furniture and equipment
- Dues
- Education related
to your business
- Employee pensions
and benefit programs
- Entertainment
and business meals (these are 50% deductible)
- Equipment, including
computers
- Freight
- Furniture for
your office or home office
- Gifts to business
associates (up to $25 per person per year is deductible)
- Home office
expenses, if you qualify
- Insurance
- Interest on
business credit cards and loans
- Legal and professional
fees, including costs for preparing the business portion of your
tax return
- Licenses and
fees
- Magazines and
books that you need for your business
- Maintenance
and repairs on equipment and office/store space
- Office supplies
- Online fees,
based on the percentage you go online for business
- Payroll taxes
paid on behalf of your employees
- Postage
- Printing and
copying
- Rent of equipment
or store/office space
- Small furnishings
and equipment
- Small tools
- Telephone (you
can deduct long distance business calls made from home even if
you don't qualify for office-in-home. Monthly service charges
are deductible only if you have more than one phone line in your
home.)
- Travel
- Uniforms or
special work clothing (i.e. steel toed boots or coveralls)
- Utilities
- Wages paid to
employees
- The above is an excerpt from
Jan's
recently revised book, Minding
Her Own Business: The Self-Employed Woman's Guide to Taxes and
Recordkeeping (Adam
Media Corporation) which is available for only $8.76 at
Amazon.com.
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