The ins and outs of justifiable business expense tax write offs
When you are in a business, you will want to make sure that you are saving as much money as possible on taxes!There are a lot of tax write offs that you probably will be able to use for your business, but you should understand the ins and outs of business expense write offs before you do anything.Here are some of the ins and outs of justifiable business expense tax write offs:
- Rent or lease payments on your business location - One of the nice things that you can get a business expense for is the rent or lease payments on your business location.However, something that you need to know is that if you are renting from an individual or an unincorporated business (such as an LLC), then you are required to send your landlord a 1099 form in January to let them know how much you are going to be deducting. You should also check with your accountant to make sure that you are going through this process of deductions correctly.
- Utilities (e.g. electrical, water, gas, telephone, cellphone) - Another thing that you are eligible to get a tax write off for is utility payments.However, you will want to make sure that these things are expressly used for your business expenses.If you want to use a cellphone for your business tax write off, you will need to make sure that you get an itemized report of your cell phone bill, so that you can actually show what calls were made for your business.Also, hang onto all of your utility bills as well, so that you can prove what amounts you charged and paid.
- - Business travel expenses - Another thing that is a justifiable business expense tax write off is travel expenses.You are allowed to use all travel expenses, as well as 50 percent of related entertainment and meals for your tax write off purposes.You should hang onto all of your receipts from your business trips, so that you can know exactly what charges you can put on your tax write off.You should make sure that these records are really correct, so that your write offs will be readily approved by the IRS if you are ever subject to an audit.
- - Guard dog for your business - Did you know that another justifiable business expense is the time that a guard dog spends guarding your inventory?This really is a justifiable business expense write off for taxes!However, you should realize that you can only write off the time that the dog spends guarding, and you can not write off the expense for the dog itself.You are allowed, though, to deprecate the dog based on its life span, as it is determined by a breeder!
- - Work uniforms or costumes - If you have a job which requires you to wear a specific costume, then this also can be counted as a justifiable tax write off for your business!However, if you can wear this clothing at a place outside of your work, then it will not count as a justified business expense.Just remember, if this is a real expense to you, and you will not be able to use the clothing anywhere else, then don't be afraid to count it as a business expense!
- Remember, it is a good idea to avoid mixing your business tax write offs with your personal life.You can easily get in trouble if you fudge the lines between your personal and business expenses.So, if you only have one computer in the house, you might want to consider buying a laptop for all of your personal work.This way, you will not have any problems using writing off your work computer when tax time comes, because you know that your computer has only been used for work!Always make sure that you make the expenses between your personal and work life perfectly clear, and you should not have a problem at all!