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  • Jason Harvey

Self Employed Business Deduction Quick Reference


With several new self-employed clients this year I have been having the business expenses conversation with some frequency while preparing their tax returns for the first time. To help clients get a head start, I put together the following quick reference and figured I would post it for other business owners to use similarly. It is not intended to be a comprehensive list and you should consult your tax advisor and all of that other fun disclaimer stuff.

Startup Expenses

  • Market survey

  • Product analysis

  • Visitation of similar businesses etc

  • Consultant fees

  • Travel costs to find suppliers, distributors, customers

  • Incorporation and legal fees

Costs of Promoting Business

  • Advertising

  • Marketing

  • Website

  • Mailings

  • Gifts for customers (limited)

Meals and Entertainment

  • Work-related meals & entertainment (limited)

  • Networking (dinner/drinks with potential referral partners/clients)

  • Meals for subordinates (pizza etc)

Travel

  • Mileage (or actual) to a work location other than regular location

  • Travel expenses for job-related education (conferences etc)

  • Tolls and parking Fees related to business purpose (non commuting)

  • Passport if necessary for business travel

Dues and Fees

  • Dues or fees for work-related organizations including union dues

  • Regulatory or licensing fee for profession

  • Bank Fees

  • Payment processing (credit card/ACH) and collection fees

Subcontract Labor

  • Freelance Labor

  • 1099

Insurances

  • Malpractice insurance

  • Errors and omissions

  • General liability insurance

Professional Advice

  • Fees for tax preparation or advice

  • Legal and accounting

  • Consultant

Physical Location

  • Home Office IF part of the home is used regularly and exclusively for work

  • Office Rent

  • Office furniture

  • Parking spaces

Property and Equipment

  • Computers

  • Software

  • Small tools or equipment required to perform work

  • Depreciation of capital purchases

  • Interest paid on business property financing

  • Cost of repair and maintenance of business property

Utilities

  • Internet - Business use only

  • Second phone lines/cell phones for business use

  • Electric, water, gas

  • Trash pickup and shred

Operational Expenses

  • Office and work related supplies

  • Copy and printing expenses

  • Postage, shipping and delivery costs

  • Answering service

  • Safety items, such as protective eyewear or steel-toed safety shoes

  • Specialized clothing designed for job (not suitable for everyday wear)

  • Dry cleaning costs for uniforms or protective clothing (not everyday clothing)

Books and Publications

  • Subscriptions to professional journals, magazines, books for your trade or profession

Education and Research

  • Educational expenses- to maintain or improve skills required in performing present job (conferences etc)

Important Non-Schedule C

  • Health Insurance

  • Pension Contribution

For more information check out:

https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses

http://www.jamesdance.com/deductions.htm

http://www.bankrate.com/finance/taxes/dozen-small-business-deductions-1.aspx

https://www.sba.gov/blogs/startup-cost-tax-deductions-how-write-expense-starting-your-business

http://www.forbes.com/2010/02/16/tax-deduction-mba-education-personal-finance-robert-wood.html

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

#selfemployedbusinessdeductionsguide #financialadvisorsmallbusiness #businessowner #CharlestonSC

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