Running and operating your own business can be downright expensive. Whether your work involves retail trade, business-to-business services, marketing, or the food industry, you will need to spend money in order to make it. The good news is that most of the money you spend on your business can be written off as a tax deduction; therefore, you don’t have to pay taxes on it. The bad news, however, is that a number of these expenses are overlooked by business owners. To ensure you business is profitable, you should familiarize yourself with some of these commonly overlooked write-offs.
Before we start, it’s important to note that you should only write off business-related expenses. Once you start trying to sneak by frivolous write offs, the IRS will likely audit you. To make matters worse, they may force you to pay for some of your past write-offs. The bottom line is that you should try to fly under the radar to avoid audits. Even if all of your ducks are in order, audits can eat through a large portion of your free time.
While you can’t write off family vacations and other forms of personal travels, you can write off business-related travel expenses. For instance, if you recently took a cross-country trip to a convention or show related to your work, you can write off your plane ticket, gas, hotel, etc. When writing off travel expenses, try to keep things strictly related to the business aspect of the trip. You obviously wouldn’t want to try and write off expensive restaurant meals, movies or concert tickets.
Have you recently sought legal counsel to protect your business against lawsuits? If so, you can write off your lawyer expenses when you file your taxes. A lot of business owners seem to forget that lawyers can be written off as an expense. And with the average cost of a professional lawyer charging upwards of $200-$300/hour, this is an expense that needs to be written off to ensure you aren’t stuck with a higher tax bill. If you don’t recall exactly how much money you’ve spent in lawyers and legal fees, give them a call and request a receipt. The couple minutes it takes to pick up the phone and call your lawyer is usually enough to have a receipt emailed directly to you.
It’s all too common for customers and clients to not pay their bill. If a past customer has stiffed you by not paying after you’ve delivered a product or service to them, you write this debt off on your taxes. It’s not something business owners like to think about, but non-paying customers does occur. Thankfully, however, you can write this off as an expense and move on to more important things regarding your business.
The truth is that these are just a few of the many write-offs you should look into. Take the time to talk with a professional accountant or CPA for more information about what you can and can’t write off when it comes time to file your taxes.