Typical Small Business Tax Deductions

Small Business Tax Deductions
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Generally, if something is a true business expense, it is probably a legitimate small business tax deduction. Below are some common business expenses that can be deducted:

  • Rent or home office
  • Employee wages and other compensation
  • Utilities, Internet, and Cell Phone (estimate the business-use percentage)
  • Advertising
  • Auto expenses
  • Travel expenses
  • Meals while traveling or with client(s) or prospect(s)
  • Professional fees
  • Business licenses, permit fees, and professional membership dues (no country clubs, sports clubs, or recreational memberships)
  • Business supplies and equipment
  • Accountant, tax preparation, and attorney fees related to the business
  • Educational expenses (must be related to the business)
  • Repairs
  • Bad debts (i.e., customer fails to pay for service or product)
  • Interest on business purchases
  • Moving expenses
  • Software
  • Charitable contributions
  • Business taxes
  • Financial institution fees
  • Parking fees and public transportation costs
  • Publications related to the business
  • Casualty and theft losses
  • Postage and shipping fees
  • Health care insurance cost–if neither spouse is covered employer-provided healthcare insurance
  • Startup expenses in the first year for a new business

Expenses related to Entertainment are not allowed.