subject: Small Business Tax Deductions [print this page] I'm Peter Holtz with the Financial Performance Center. A question I get a lot of times is, "What can I write off as a business expense?"
Well, basically, what the IRS lets you write off and the IRS rules really follow into the state of California is necessary and reasonable business expenses. Now, the question is, "What is necessary and reasonable?"
That's really any expenses driven from trying to generate some revenue, trying to generate from sales or activity that has a profit motive. There are a lot of options and a lot of things you can do. It will all depend on how you structure your expenses and how you work them.
Obviously, key is the proper documentation. You need to segregate your business and personal. This is very important when you run a business. It's also important to keep a Day-Timer like daily journal or planner to document your expenses and the business purpose.
You have to keep receipts over $70. Under $70, you don't really need to keep them, but you need to have a record and the IRS really wants you to keep that as a handwritten record.
- Any vehicles you use for business purpose. They could be your own vehicle. You can take a miles deduction or we can take a percent of business use.
- Any office and all related supplies equipment, office rental.
- Employees, including your family, that are actually engaged in the business.
- Business Entertainment you can definitely write off. You just need to keep the business purpose and what you're spending in your daily journal.
- Other obvious business expenses advertising, insurance, and all the other usual stuff.
There are many, many more and I don't really suggest you shy away from them just because you think they're going to be an audit red flag. The key is to document, structure, and to be aware of whatever those business expense are.
And sometimes, it takes looking at it. Other good examples could be seminars or other education expenses are definitely a business expense if they relate to your business.
It's really important to try to be aggressive on these and to try to have the right documentation.
I'm Peter Holtz from the Financial Performance Center.
Visit my website at www.financialperformancecenter.com
Small Business Tax Deductions
By: Peter Holtz
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