Meals and Entertainment This one can get tricky at times and it is actually easier than you think to abide by the guidelines. Watch this video for a better understanding:. Contract Labor This category is for any independent contractor that you hire to help you with your business. For example, maybe you want to hire someone to write a blog for you, create a book cover, perform some SEO for your business, or put together an advertising campaign. This is the category that work would fall in.
If you have any questions concerning exceptions, please consult with your CPA because they will have a better understanding per state regulations.
If you are not following any of these categories, then you are leaving a great deal of money on the table. The easiest way to conquer your taxes is get organized and not let it build up over the year, and then try to manage under the stress of deadlines. Post Sponsored By.
The Comprehensive List of Small Business Tax Deductions
Insurance : Paid for your business only. A portion of your cell phone is allowed. Our number one tip for business owners is tracking ALL expenses. Because it will increase your tax loss and increase your refund. Network Marketing Tax Advantages. At least one employee must be present at the meal or outing. The food and beverages must be provided to a current or potential business customer, client, consultant or similar business contact. Food and beverages provided during or at an entertainment activity may only be deducted as long as they are purchased separately from the entertainment or the cost of the food and beverages is stated separately from the cost of the entertainment on one or more bills, invoices, or receipts.
Recreational and social activities held for employees.
Meals provided as compensation or part of the company culture. Notable exceptions to the entertainment rule include: Amusement parks and tourist attractions. Membership fees for dinner, sports or recreational clubs. Golfing green fees, cart rentals and club memberships. You may also deduct all of the costs for meals and entertainment related to a fundraising event for a registered charity.
Beachbody Coach? Rodan & Fields Consultant? At Tax Time, Beware The Hobby Loss Rules
Receipts are required for all of these expenses. It also helps to make notes on the back of credit card or cash register receipts documenting the business use. This includes owners. Office Supplies, Tools and Services Did you know that box of paper clips you just bought can actually be claimed as a tax deduction? United States You may claim: Day-to-day shipping, courier, postage and other delivery services. Shipping and freight as part of the manufacturing process is claimed under the costs of goods and services.
You may deduct most office supplies and like costs as long as they are used within the year they are purchased.
Meals and Entertainment
You may deduct phone, internet or utility gas, oil, water, etc. Note: If you office at home, these items are claimed under the home office deduction. Canada You may claim: Phone, internet and utilities. Day-to-day shipping, courier, postage and other delivery services. Shipping and freight as part of the manufacturing process are claimed under the cost of goods and services.
Rental fees for leased computers, fax machines, etc. Indirect supplies like medicines for veterinary practice or cleaning supplies for a carpenter. Cleaning supplies. Small items like pens, paper, paperclips, etc. The following should be claimed as capital expenses: Office furniture, including desks, chairs and filing cabinets.
Computers and software. This is still a new rule, which means that it's best to seek professional guidance on how it should be applied. Taxable income. The business or reduced business limit. The SBD excludes personal service businesses. Rent and Property Leases You may claim rent paid on office space and other business properties.
It is recommended that you keep copies of the lease agreements and rent receipts, as you will be required to provide these documents should you be audited. The rules are fairly similar in the United States and Canada. In the United States, you may not claim this deduction if you own any equity in the building where you rent. You may also claim rental payments on machinery and equipment. It is a refundable tax credit, so even if your business fails to make a profit, you will still receive a cash refund.
It allows you to deduct the full amount of expenditures in the year they were incurred. Unused deduction amounts may also be carried over to the following year. Salaries and Wages The wages and benefits you provide for employees are not a one-way street.
Network Marketing Has Significant Tax Advantages
Salaries and wages Bonuses, commissions and awards Benefit programs — life insurance, education reimbursements, etc. Employment Insurance EI premiums. Workers' compensation accounts. Any premiums paid for employee illnesses, accidents, disabilities or income insurance plans. Any salary you pay your child, spouse or common-law partner.
Utilities In both the United States and Canada, you may deduct phone, internet or utility gas, oil, water, etc. Taxes You can actually deduct taxes from your taxes. United States Employers may deduct: Employer-paid payroll taxes.
Excise and fuel taxes. State income tax — as an itemized deduction. Real estate taxes on business properties. Canada Employer-paid payroll taxes. You may deduct the cost of property taxes. If you office at home, property tax claims are taken under the home office deduction. Travel When you travel overnight for business, you may claim the costs of transportation car, bus, train, plane, etc. United States If you bring friends or family along, you may only expense your costs related to your business.
Unless your friend or family member is an employee. Factors like the percentage of time spent on business, destination domestic or international and length of stay all affect the claim amounts.