Don’t Forget to Write Off These Business Expenses for Tax Season
As a business owner, it may be difficult to know exactly what expenses qualify to be written off at tax time. Surprisingly, the IRS doesn’t have a list of specific items (though if they did, it would probably be miles long), so it’s kind of at your discretion.
The tax code specifies though that expenses qualify if they are for the production of income. What does that mean? Below are a list of business expenses you may not have thought of to write off this year.
If you’re paying for services to run your business, those are tax write-offs. If you have an accountant, pay fees to your bank, or have an attorney, all expenses incurred are deductible. Fees for a consultant are also a write-off.
If you lose money due to theft, or offer a discount to your customers, those are write-offs as well. Bad debts are deductible as well. A bad debt is when someone owes you money that they either cannot pay or you cannot collect. Obviously it must be a business related debt, but if you’re unable to collect, it’s an expense for you.
If you have big machines, equipment, land, or any other asset that you own and is used to conduct business or produce income, it can be used as a write-off. You can depreciate those items in two different ways. First, you can deduct the value of all of them at once, meaning you can’t claim them the next year. Second, you can take the value of the items, divide it by 5, and have it depreciate equally for five years. It’s best to talk to your accountant to determine the best way to depreciate assets specific to your business.
If you’re paying interest on a business loan of some sort, typically the interest paid is a write-off.
There’s a more inclusive list here of more deductions.