The topic of deductions has come up a LOT lately…
What can we as business owners truly deduct?
Ask an accountant and you may hear varied answers.
Some are more conservative, some are more risky.
And being one way or the other isn’t necessarily better….
Some deductions lie in the gray area, and may require some type of “argument”, they are not always black and white.
Personally, I work to reduce my clients tax bill by doing anything I can, while still staying within the law.
I wanted to shoot this quick list over to you so you had a quick snapshot of some deductions almost ALL business owners have:
1. Traveling to conventions, clients, meetings, meet with prospects, business meals, etc.
2. Cell Phone bill
3. Internet for your home – a percent of this is business use (not all 100%
4. Home Office – includes landscaping, pool, security, insurance, rent, mortgage interest, property taxes, etc etc…you get a % of this based on the SIZE (sq ft) of your Office vs. The Entire Home. Tip – Pick the bigger extra room 😉
5. Dues & Subscriptions – if you’re in the fitness industry you probably have to pay dues to places like: Gyms, NASM, ACE, etc. Play music in your gym or for classes? Deduct spotify/music costs.
6. Continuing Education / Professional Development – if you hire a coach or a consultant or someone to educate you, even to meet the CPE requirements for your license, these are all business expenses
7. Legal, Professional – CPAs, Lawyers, Marketers, Assistants, etc. Anyone you pay to provide some professional service = business deduction.
8. Insurance – any business insurance you get = deduction
9. FB, Google, Yelp ads
10. Business meals with clients, prospects, business partners, – 50% deduction (you get to deduct their half, not yours)
11. Auto expense – if you have your vehicle as listed property for the business, you will deduct ACTUAL vehicle expenses (gas, oil, repairs, insurance). If your vehicle is not listed on the business books, you normally would take miles – about .59c per mile in 2019. You can also be reimbursed by your business using an accountable plan.
12. Payroll / Staffing Costs – you can deduct any staff meals and staff meetings
13. Retirement – you can deduct SEP IRA contributions, 401k contributions – these all vary by how your entity is structured
14. Computer / software expenses – gmail business account, any other software like Microsoft Office you use.
15. Website hosting, development, images, etc.
16. Rent, utilities, repairs, improvements to the leased space
17. ….Oh my gosh, are you sick of reading these yet? 😉
TIP: When you are paying for something, think
“Is this for my business?”
There are some things you can not legally deduct so this won’t always work, but it is one of the easiest ways you can determine if you should deduct it as a business expense or not.
Interested to chat further about any of the following?
a) Earning two weeks of tax free income
b) Shifting income to legally deduct your kids expenses + college
c) Getting paid to hold staff meetings outside of your workplace
If so, just hit “REPLY” to this email, and we’ll set up a call to chat more about you and your situation.
P.S. – I recently joined James Patrick on the FITposium podcast talking about business and taxes – check it out HERE