A L Bean & Company

January 27, 2014

Small Business: Tax Time

Filed under: Tax,Uncategorized — artlbean @ 10:13 am

Small business owners often want to know what is tax deductible. Here are a few items. They may or may not apply to your business. Contact us or another tax advisor to see if they apply to you.

Deductible Business Expenses
According to the IRS, for business expenses to be deductible, they must be ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business, trade, or profession. A necessary expense is one that is helpful and appropriate for your business, trade, or profession.

a. Business Start-up costs – Business start-up costs are the expenses you incur before you actually begin business operations. They may include costs for advertising, travel, surveys, and training. The IRS has strict guidelines on how to deduct these expenses. There are limits on the amount that can be deducted in years one and beyond. Please contact us for further information regarding start up costs.

b. Automobile Expenses – If you use your car or truck in your business, you can deduct the costs of operating and maintaining it for business purposes. You generally can deduct either your actual expenses or the standard mileage rate.

c. Other ordinary and necessary expenses – expenses for office equipment, postage, phone, internet, rent, computers, and others. Keep in mind that some expenses should be depreciated over a period of time. Business property you must depreciate includes: office furniture, buildings, machinery and equipment. There are very specific guidelines regarding depreciation. Please contact us for further detail.

d. Business Use of Your Home – This one can be complex. Consult us or another tax advisor on whether this applies to your business.

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