The Deductible Dozen For Small Business – Part 2 of 3

Tax-Deduction-1Last week, in Part 1 of The Deductible Dozen, I covered the first four of twelve business deductions:

1. Home office

2. Office Supplies

3. Furniture

4. Other stuff

Now we’ll cover four more deductions you should consider for your small business.

5. Software and subscriptions. One of the largest expenses as a small business owner that I incur is software. I use a computer to do most of my work with clients except the face to face consultations. In the past you had to depreciate software over 3 years. Now it can be expensed 100% in the year it was purchased. So don’t forget about all those little annual subscriptions for trade publications and magazines! 

6. Mileage. One of the most confusing and often miscalculated and abused deductions. If you drive you can deduct your mileage. You must document in some sort of notebook the mileage, tolls, parking meters, ect. and the cost and purpose of the safari.

You have choices when it comes to the deduction. First you can add up all the mileage and then add in any tolls  and parking. Then you multiply the mileage by 55.5 cents a mile.

The alternative declaiming miles driven is to deduct the actual costs of operating a vehicle. You must keep accurate records of every receipt. Some examples of actual costs are gas, insurance, car repairs, parking costs, toll road cost, ect.

7.Travel, meals and entertainment. Hotels are 100% tax-deductible for business purposes. Also the cost of travel such as trains, planes and automobiles. Other missed deductions for being a roadie are dry cleaning that shirt you dropped food on, tipping and rental cars. For meals the deduction is capped at 50%. A direct gift to a client is 100% deductible such as a dinner gift card.

Well, that’s all the free ideas you get this week! Next week I’ll cover the remaining four Deductible Dozen. If you haven’t downloaded my free eBook for business owners, you can right here. If you would like any help with maximizing wealth for your business, write me at david@lexwealth.com, or call me at (859) 225-2596. Otherwise, I’ll see you next week.