Running a business comes with a lot of challenges. When tax season comes around, it may seem like just another obligation you need to take care of. Instead of dreading doing your business’s taxes, it may be an opportunity to reduce the value of your business assets through write-offs.
However, not everything in your business is a write-off, so it is important to understand what is and is not a write-off before you make a serious tax mistake. Here are some examples of what you can and cannot write off for your business’s taxes:
Things you can write off
You are able to deduct business expenses from business earnings in the form of a write-off to reduce the amount of taxes you have to pay each year, but the items you write off need to be valid. Common examples of actual write-offs are:
- Vehicle expenses (if the vehicle is used for business)
- Business meal expenses
- Office supplies
- Insurance costs
- Rent and lease expenses
- Travel costs
- Employee wages and insurance
When your company is responsible for the cost of something, it is likely that the expense will qualify as a write-off.
What you cannot write off
Some people may get too aggressive with what they write off and end up trying to deduct nondeductible expenses like:
- Business fines
- Hobby losses
- Commute expenses
- Political contributions
- More than $25 per business gift
- Personal expenses
Even if the business experienced these expenses, they still do not qualify as a deductible. Finding the line between valid and invalid write-offs can be hard, but there is help.
Get a helping hand for your company taxes
If you are trying to get the best possible outcome in your business’s taxes this year, consult with a tax consultant with experience with business taxes. They can help you review your unique situation to determine what you can write off to get the most from your taxes this year.