I know it's only September, but tax season is year-round! Since I get asked all the time about deductible expenses, this week will be dedicated to sharing information on expenses that are acceptable by the IRS.
There are several types of deductible travel expenses, including costs related to trainings, conventions, trade shows, seminars, speaking engagements and business meetings. This includes the following: - Mileage (54.5 cents per mile for 2018) - Parking - Tolls - Flights - Rental car fees - Hotel fees - Meals (under IRS guidelines, you can deduct 50% of the cost of business-related meals) As always, make sure to retain your receipts or other proof of the spend for your records!
LICENSES + CREDENTIALS
A common deductible expense that a lot of people are not aware of are licensing expenses. If the license / credential is related to your business practice you can deduct the expense for attaining or renewing. For example, as a CPA, I have not only the cost to renew my license, but also continuing education requirements to mantain it. Do you have a professional credential that is reasonable and necessary for your business work? Keep track of the related expenses incurred to include as a deduction on your tax return.
Home office deductions - can you or can't you deduct? This is a category that many people are uninformed about, but it's actually pretty straightforward. The rule is that a home office space must be regularly and exlusively used for business. So yes, the expenses related to your home can be deducted, but you are only allowed to deduct the percentage that corresponds to the portion of your home that you are using to conduct business. For example, if your home office represents 10% of the square footage in your home, you are allowed to deduct 10% of your home costs (i.e. mortgage interest, property taxes, rent, and utilities). Of course, this means that working from your home does not mean you can deduct 100% of your home expenses, and it's a no-go on claiming your dining room as a deduction simply because that's where you do your work.
Office expenses is another common tax deduction category and includes the purchase of office supplies and equipment, such as a dedicated business computer, printer, smartphone, or tablet. You can also deduct a percentage of internet and cell phone expenses, as well as the software you use to perform business functions. Using your Amazon Prime account to buy business items? Make sure you're keeping track of what you're buying and have support on hand in your records in the event the tax authorities ever want to *ahem* "review" your tax return.