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When Can I Deduct Business Expenses
For business owners, the question of tax deduction is often a murky and confusing one. Depending on how much income your business brings in, there are potentially thousands or millions of dollars in savings if you know which deductions to take. However, you don't want to take deductions that aren't allowed because you face the possibility of an IRS audit, which could lead to hefty fines.
The best way to know for sure if you can deduct business expenses from your taxable earnings is to contact a tax lawyer or certified business accountant. However, there are some general guidelines you can use to develop a tax plan that should stand the scrutiny of your lawyer and the IRS alike.
Tips For Business Expense Deductions
When considering which expenses you can deduct for your business, think about every purchase you've made that your business has needed to exist.
- Office supplies, computer equipment, specialty items and raw materials can be deducted for tax purposes.
- Rent and utility bills can also fall under the heading of business deductions as long as they are solely used for generating income for your business. If you have a multi-purpose space such as a home office, you need to calculate the percentage of area your office takes in your home and only deduct that percent of the rent and utilities.
- Travel expenses, business meals and gas cost may be factored in to your business expenses, but again, only if said travel was expressly used for business purposes.
It may help to get a separate credit card and only use that card to make business-related payments. This will allow you to easily track your business expenses and, in the event of an IRS audit, will help to show auditors that your records are accurate and up to date.
Where A Tax Lawyer Can Help
If you are unsure about a specific business expense, a tax attorney will advise you on the best way to move forward. Your tax attorney will also advise you in the event of an audit and provide a list of options and preparation strategies. Contact a tax lawyer today if you need help with your deductible business expenses!