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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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