What investments can be used as business write-offs?

One of the good things about owning your own business is the ability to write off certain business expenses and investments. This means that you can deduct the price of your investment or item from your overall taxable income, saving you money in the long run.

You can end up saving a lot of money when it comes to writing off investments. However, there are a number of rules pertaining to tax write offs that must be adhered to; if you write off things that are not legitimate business expenses, then you run the risk of being audited by the IRS.

What are investment expenses?
The first thing you must determine is what legitimate investment expenses that you can write off are. These include:
Professional investment advice. The fees charged by your investment advisor can typically be written off.
Accounting or legal fees that have to do with your investment activities
Subscriptions to investment publications or sites
Investment interest expenses, such as margin interest on brokerage accounts. This can become quite complicated, and you should use IRS Form 4952 to determine what your deductible interest expense is.
The portion of internet charges used to follow and trade investments
Your home computer, if it is used for investing purposes
Your home office. As a general rule, however, you can only write off your home office if it is your principle place of business, if it is regularly used to meet with clients, or if it is a completely separate structure apart from the residence portion of your home. In other words, if you are using your "home office" to surf the web and check the stocks before going to your day job, you can't write it off in your taxes. Also, you shouldn't use your home office for investment management activities, as it will put you in violation of the "exclusively for business" rule.

What you can't deduct
The following are some investment expenses you will not be able to deduct as business write-offs:

Any costs that have to do with tax-exempt securities. Because they result in tax-free income, you will not be able to write them off.
Trading commissions can't be written off either.
Travel costs associated with investment activities; this includes investment conventions, seminars, and meetings in addition to the fees associated with attending these activities.

If you are new to investing for your business or investing in general, you would be wise to hire the services of an accountant or investing professional who can help you determine what you can and can not write off as investment expenses in your taxes. Make sure the broker handles the type of investment you are interested in. This may seem fairly obvious, but many brokers specialize, and there are many different types of investments, including stocks, bonds, mutual funds, options, offshore trading, and so forth). An investment advisor or accountant experienced in business investments can prove invaluable for you if you're new to investing and are unsure what sorts of investments and fees you can use as write-offs when you do your taxes.

There are a number of things you can write off on your taxes that have to do with the business investments you make.

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