| In an earlier article, I talked about how you, as a | | | | attorney.] |
| small business owner, can rightfully claim many small | | | | OK, then, now that is out of the way, here are the |
| business deductions as a way to reduce your taxes. | | | | rules: |
| In this article, I'll present several more. Check to see | | | | You, as an individual, can write off 30-50% of your |
| if you have included these in your tax planning. | | | | adjusted gross income as long as the organization |
| 1. Deductions for Travel | | | | you are donating to qualifies as a 501(c)(3)charity or |
| If you fly somewhere on business and you are not | | | | foundation. |
| reimbursed for that expense, you can claim a | | | | A corporation can write off up to 10% of their |
| write-off. As always, keep a detailed log or diary of | | | | taxable income. |
| your expenses. You can claim associated expenses | | | | If you donate more than $250 you'll need to have a |
| such as taxi fares, subway tokens - and even stuff | | | | letter from that organization that confirms your |
| like dry-cleaning expenses. As for meals, you can | | | | contribution. Make sure you read IRS Publication 551 |
| write off half your meal expenses. | | | | as well as the rules set forth in Section 179. Consult |
| You can even write off expenses you incur for | | | | your tax professional for more details. |
| employees and/or business associates that you are | | | | 4. Deductions for Advertising |
| traveling with (friends and family members are out). | | | | It's true: you'll either advertise your company now, or |
| Consult your tax professional for more details. | | | | when you have your going out of business sale. |
| 2. Deductions for Software | | | | Either way, advertising and marketing expenses are |
| If your business uses customized computer software | | | | deductible - if they are directly related to your |
| you can claim the expense of that software as long | | | | business. They fall under the "Miscellaneous" category |
| as you spread out the deduction over three years. | | | | of write-offs. Check out IRS Publication 535 and |
| But...Section 179 of the IRS rules allow you take the | | | | consult your tax professional for more details. |
| write-off on computer software all in the first year, | | | | 5. Deductions for Legal and Professional Fees |
| IF that software is "off-the-shelf," in other words, | | | | OK, I saved this one for last because it relates |
| something like Microsoft Office. | | | | directly to the thing I've said many times already: |
| 3. Deductions for Charitable Contributions | | | | "Consult your tax professional for more details." |
| When discussing this kind of deduction, the rules are | | | | Fact is, fees you pay to your attorney and/or |
| a bit complicated. For starters, if your small business | | | | accountant are deductible - under certain conditions. |
| is a partnership, or if it is classified as an S | | | | For example, you can't write off professional fees |
| corporation, or if you're organized as a limited liability | | | | you expend when you buy a business asset (e.g., |
| company, your members will be filing the company's | | | | equipment). In that case, you include the charges in |
| taxes on your personal forms - including donations to | | | | the cost of the purchase. |
| charity that you have made. In other words, | | | | Sole proprietors can take a write-off on fees paid for |
| charitable donations are a "pass-through," as is the | | | | tax prep. Use Schedule C or Schedule C-EZ. In |
| case with the company's income. C corporations are | | | | addition, uses Schedule A of your 1040. Make sure |
| entitled to corporate deductions. | | | | you check with your tax preparer for complete |
| [Note: if you don't know what kind of classification | | | | details. |
| you fall under, consult your tax professional or your | | | | |