Tag: income tax return

Business Expenses That Can Be deducted On Schedule C

The IRS indicates that a business expense is deductible if it is ordinary, necessary and directly related to running a business.

The following categories are included on the Schedule C, IRS form, used by sole proprietors to report their income:

  • Advertising
  • Car and truck expenses
  • Commissions and fees, contract labor
  • Depletion
  • Depreciation and section 179 expense deduction
  • Employee benefit programs
  • Insurance, interest
  • Legal and professional services
  • Office expense
  • Pension and profit-sharing plans
  • Rent or lease
  • Repairs and maintenance
  • Supplies
  • Taxes and licenses
  • Travel and meals
  • Utilities
  • Wages

Additionally, the following expenses fall under the 20 categories from Schedule C and are deductible:

  • Utility Expenses for Small Business Owners
  • Rent or Mortgage Payments
  • Home Office Costs
  • Website and Software Expenses
  • Business Licenses and Permits
  • Bank Fees and Interest Payments
  • Professional Fees and Business Services
  • Entertainment Expenses
  • Business Meals and Travel Expenses
  • Furniture, equipment and machinery deductions
  • Office Supply Expenses
  • Marketing and Advertising
  • Membership Fees
  • Auto and Vehicle Expenses for Business
  • Business and Health Insurance Premiums
  • Payroll
  • Local and State, Property, Payroll Taxes
  • Employee benefits
  • Training and education

Tax Write-offs for Small Businesses

You are working hard making your small business profitable. Expenses are piling and tax write-offs (i.e., deductions) are a helpful relief for your small business on tax day.

What Can A Small Business Write-off?

Your business expenses can translate into tax write-offs if they are considered essential to your business and common in your industry. Here’s a list of common deductions made by business owners in any given tax year:

  • Office space rent or used for business, including home offices
  • Related utilities; home-based business owner can deduct a percentage of their home utilities total
  • Office expenses, such as paper and printer ink
  • Equipment (from computers to specialized tools and machinery)
  • Internet and phone
  • Software
  • Payments to employees and independent contractors
  • Business related training and education (including subscriptions and publications)
  • Credit card processing fees, merchant and gateway fees
  • Advertising and marketing, website related expenses
  • Taxes (real estate taxes, payroll/self-employment taxes, etc.)
  • Business insurance and E&O insurance coverage
  • Local and state business license fees
  • Retirement plans and other benefits
  • Interest payments
  • Business travel, vehicle used
  • Business meals (50% can be deducted)

For all your credit repair needs, call 702.541.8216

Tax Credits and Deductions for Individuals

Tax credits are amounts that you can subtract from the amount of tax you owe.

There are two types of tax credits.

  • Nonrefundable
  • Refundable

The tax credits for individuals can also be divided as:

  • Family and dependent credits
  • Income and savings credits
  • Homeowner credits
  • Health care credits
  • Education credits

Individual tax deductions are amounts that you subtract from your income before you figure out the amount of tax you owe.

Like tax credits, tax deductions can be of different types:

  • Work related deductions
  • Itemized deductions (included here are property taxes and charitable donations)
  • Education deductions (student loan interests are classified as education deductions)
  • Health care deductions
  • Investment related deductions

More details can be found on the Internal Revenue Service website