Benjamin Franklin said it best when he coined the phrase, “A penny saved is a penny earned.”
Many business owners take years to understand that taxes are one of their biggest costs, and it really doesn’t take a lot of effort to make sure you aren’t missing something on your taxes.
Before setting forth my list of the top 75 deductions/strategies, allow me to make an important point: You are the captain of your own ship. You don’t have to be an accountant to manage your accountant. Make sure you have a regular conversation with your tax preparer and discuss these items.
Your accountant should be suggesting these to you … and they should be trying to find ways to write-off expenses — not just telling you no and talking down to you. Use this list as a discussion point and make sure you have the right person helping you with your taxes.
Consider this list of 75 possible tax deductions for business owners. It’s just a start and not every one of these items is always a viable deduction, but certainly worth a discussion.
75 possible tax deductions (plus two bonus deductions)
- Accounting fees
- Advertising
- Amortization
- Auto Expenses
- Banking fees
- Board Meetings
- Building repairs and maintenance
- Business Travel
- Business association membership dues
- Charitable deductions made for a business purpose
- Children on Payroll
- Cleaning/janitorial services
- Cameras
- Collection Expenses
- Commissions to affiliates
- Computers and tech supplies
- Consulting fees
- Continuing education for yourself to maintain licensing and improve skills
- Conventions and trade shows
- Costs of goods sold
- Credit card convenience fees
- Depreciation
- Dining and Office food
- Drones
- Education and training for employees
- Equipment
- Exhibits for publicity
- Franchise fees
- Freight or shipping costs
- Furniture or fixtures
- Gifts for customers ($25 deduction limit for each)
- Group insurance (if qualifying)
- Health insurance
- Equipment repairs
- Health Reimbursement Arrangement
- Health Savings Account
- Home office
- Interest
- Internet hosting and services
- Investment advice and fees
- Legal fees
- Leased Vehicle or equipment
- License fees
- Losses due to theft
- Materials
- Maintenance and janitorial
- Mortgage interest on business property
- Moving
- Newspapers and magazines
- Office supplies and expenses
- Outside services
- Payroll taxes for employees, including Social Security, Medicare taxes and unemployment taxes
- Parking and tolls
- Pass-Through 199A Deduction
- Pension plans
- Postage
- Prizes for contests
- Real estate-related expenses
- Rebates on sales
- Rent
- Research and development
- Rental Property
- Retirement plans
- Royalties
- Safe-deposit box
- Safe
- Spouse on Payroll
- Social media advertising
- Software and online services
- Storage rental
- Subcontractors
- Taxes (Personal and Real Property)
- Telephone
- Utilities
- Video equipment for business YouTube channel
- Website design
- Workers’ compensation insurance
Surprisingly, there isn’t some master list included in the Internal Revenue Code or provided by the Internal Revenue Service. There is simply the tax principle, set forth in Code Section 62, which states a valid write-off is any expense incurred in the production of income. Each deduction then has its own rules.
A good CPA should be teaching their clients to think above the line — that is, your Adjusted Gross Income (AGI) line. Your AGI is the number in the bottom right-hand corner on the front page of your tax return. Any tax return. And what I mean by thinking above this line is constantly trying to think of any and all personal expenses that may have a business purpose. With a small-business venture in your life and on your tax return, you may be able to convert some personal expenses to business expenses, as long as you have the proper business purpose for that expense.
Seasoned business owners become proficient over the years at keeping good records and realizing when expenses have a legitimate business purpose. For some, this thought process becomes so ingrained that it becomes almost impossible to buy something without first considering a tax purpose for that item or service.
In sum, try to track every single expense related to your business and comb over them with your CPA at the end of the year to ensure you only take legitimate deductions. Good record keeping and thoughtful consideration will minimize your risk of an audit if the IRS ever comes knocking.
