For example, if you drive an hour to attend a business meeting with a client and then go to the grocery store on the way home, you would need to subtract the additional mileage to reach the store. If you handle personal and business matters during one trip, you can usually only count the mileage related to your stated purpose. However, you’ll need to keep detailed records of: If you use your personal car, mileage accrued for business expenses may also be tax deductible. You can normally deduct expenses related to the purchase and upkeep of company-owned vehicles from your taxes. In some cases, you can also claim depreciation on leased and rented equipment to further reduce your tax liability. You may also be able to take small business tax deductions on any money that you paid to rent or lease office equipment, office furniture, tools and machinery.
Additional expenses paid to your landlord for property management, security and other services may also be deductible. This usually includes both your base rent and any common area maintenance (CAM) fees that you pay. If your business rents space, your rent payments may be tax deductible. Some things that contribute to the cost of goods include the following: Normally, this involves valuing your inventory at the beginning and end of the year and calculating the cost of goods sold. InventoryĬompanies that manufacture or buy products to sell may be able to deduct the cost of inventory. For example, you normally can’t deduct the cost of your primary telephone landline, but second lines used exclusively for business may be deductible. If you maintain a home office, there may be some restrictions on deducting utilities. Heating and cooling, if it doesn’t fall under electricity or gas.You can normally deduct the cost of utilities paid at your place of business. Life insurance used for succession planning.Premiums paid for most types of business insurance are tax-deductible, such as: Most other startup costs fall under the category of capital expenses, which you usually amortize over a set number of years rather than deduct all at once. Travel expenses related to establishing relationships with initial suppliers, distributors or customers.Money paid to consultants, attorneys and accountants.Fees for conducting studies to explore market conditions, labor supply and competitors.Costs of training employees and paying instructors for training.Some startup costs may be tax deductible, including:
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