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Trusted Answers From Licensed Business Professionals

There’s only a little over a week left until personal and small business tax returns are due. As you’re finalizing your tax return, you may want to consider if you’ve claimed certain business related tax deductions. You could be leaving money on the table.

Did you claim mileage for business travel?business-tax-deductions
It’s best to have a daily log detailing your business travel with pertinent information related to the client site, miles traveled, date/time etc. However, if you haven’t been very diligent, you can still go back and estimate your mileage according to your daily route. For instance, when traveling from your home office to other temporary business locations or client sites, you can deduct the actual travel expenses or claim the standard mileage rate ($0.555 per mile). If you traveled a total of 10,000 miles to various business locations, you could deduct $5,555 (10,000 * $0.555). The total tax deduction would result in a $1,940 reduction to your overall tax liability, which assumes a 35% tax rate.

Are you deducting your cell phone bill?
IRS and tax court rulings support deducting 100% of cell phone expenses as long as you have at least one home phone dedicated to personal calls. This can easily add up to over $1,000 in tax deductions as monthly fees for many smartphone users are at or near $100 a month.

Don’t be afraid to deduct business dinners
You can deduct 50% of meal and entertainment related expenses that serve a business purpose as referenced in Section 274 of the Internal Revenue Code. Please note though that there are two types of entertainment expenses as defined by the IRS: those that are 1) directly and 2) indirectly related to the business. Directly related means that the sole purpose of the entertainment was for business and the expectation was for money to be generated during the meeting. Indirectly means that there was entertainment associated with business such as attending a sports contest or a theatrical performance. In this instance, generally you can only deduct the expense if there was a significant business discussion that occurred during the entertainment event. Of course, you will need to document what was discussed and how it relates to the business.

Are you claiming your technology tools?
We live in a business world that relies heavily on technology. If you use a computer, tablet (iPad), or other technology device to further your business productivity that is ordinary and necessary in your industry, then it’s likely a deductible expense. These items are fully deductible expenses as long as you can find a business purpose for it.

More Questions? Ask your business tax questions or find a cpa online.

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->Tax Deductible Commuting Costs That Can Benefit The Self Employed
->Can Self Employed Business Owners Deduct Medicare Premiums?

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