10 deductible expenses that you probably already paid for

Everyone should know the many absurd tax rules that affect their business.  Here are 10 expenses that you probably already paid for that could be deductible.

This list isn’t complete – there are many more deductions.  Furthermore, fine print goes with almost every tax deduction.  Before taking any deduction on your tax return, consult with your tax professional or learn the rules.
  1. Office at home.  You may be able to deduct a portion of your housing expenses.  Look it up here.
  2. Office supplies. This is a no-brainer, as long as your supplies are used for your business and not personal use.*  Save all of your receipts from Staples and Office Depot.
  3. Interest.  If you fund part of your business with a personal credit card, the interest paid may be deductible.  Check it out here.
  4. Your car.  If you use your car for your business, check out the rules here.  
  5. Entertainment.  A ball game or concert with business associates may be partially deductible if it meets the IRS rules.
  6. Travel.  A business-related trip could be tax deductible.  Here are the rules.  Even conventions may be deductible.  Sorry, the IRS even allows limited deductions for cruises.  
  7. Gifts.  The IRS has many limits on this, but it’s doable.
  8. Health insurance.  The IRS permits deducting the cost of a self-employed person’s health insurance premiums.  Rules are here.
  9. Bad debts.  If you record a sale, but fail to collect the money, the write-off is tax-deductible.  Rules are here.
  10. Cost of new computers, equipment, etc.  These may be fully deductible under Section 179.
To take advantage of these deductions, keep careful records of your spending.

Many of these items could be taken as personal deductions.  Business expenses reduce your self-employment tax, while personal expenses do not.  If you are self-employed, you will usually save more money by deducting them as business expenses, rather than as personal expenses.

*My five-year old daughter liberally uses my paper, highlighters, scotch tape and staples.  The items she uses for arts and crafts are not deductible.

About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.

No comments yet... Be the first to leave a reply!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: