FollowBusinesses May Be Able to Write Off These Expenses on Their Taxes
- Convention and Trade Show Expenses
- Gifts for Customers
- Maintenance, Janitorial and Cleaning Services
- Utilities, Internet and Phone Service
- Business Vehicle Expenses
Business owners often operate on thin margins of profitability, and these five surprising expenses businesses can write off could help a lot when it comes time to file the annual tax returns with the federal and state authorities. The type of incorporation will play a key role in which expenses can be written off. An accountant can always provide advice about which expenses can be written off on a business tax return.
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1. Convention and Trade Show Expenses
Setting up at a convention or trade show is a good way to market a business’s products or services. Renting a trade show or convention booth can be quite pricey. For example, vendors at a recent Vogue Knitting convention in Columbus, Ohio paid $950 for the booth rental. If they wanted to rent a table, the cost was another $250. Business owners could deduct those expenses as well as the airfare, lodging, and ground transportation costs to a convention or trade show.
2. Gifts for Customers
Business owners can also deduct the cost of gifts for customers. The Internal Revenue Service limits these deductions to $25 per customer. If a business has a grand opening party and gives $25 gift cards to the first 100 customers, all if this could be a deduction on the taxes. The gifts could also include actual items, such as tee shirts worth $20 or pens worth $1. This deduction is available to businesses of any type and any size.
3. Maintenance, Janitorial and Cleaning Services
Even if a business does not operate a storefront, it still has to maintain a certain level of cleanliness and safety. Business owners can deduct the cost of maintenance and repairs to the structure and their equipment. If there is a catastrophic event that causes damage, such as a frozen water pipe, the amount not covered by insurance can be deducted on the taxes. Routine janitorial and cleaning services can also be written off of the taxes.
4. Utilities, Internet and Phone Service
The electricity, heating, air conditioning, water, internet, and phone service expenses can add up quickly, even for a small business. Fortunately, the Internal Revenue Service allows all of these business expenses to be written off on federal taxes. There is no maximum for the amount that can be written off for utilities, phone and internet services. The business owner will need to keep all of the documentation related to their utility expenditures. The payment fees can also be deducted, which is important for business owners who pay online with a credit card and incur a payment processing fee.
5. Business Vehicle Expenses
According to Inc.com, sole proprietors can take several write-offs on their business vehicle expenses. This includes the current $0.56 per mile deduction for business travel. It also includes the business portion of tolls. They can also deduct a portion of the interest on their car loan for a business vehicle.
Business owners should be sure to keep all documentation of every expense they incur, whether it is a repair bill for a window or a purchase order for customer appreciation gifts. The documentation will be essential for filing taxes and providing proof in case of a future audit. Each of these five surprising expenses that businesses can write off on their federal or state income taxes could make a big difference in the profitability of the enterprise.
