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Small Business Deductions
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Flashcards
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Internet and Phone Bills
Deductible for the portion that is used for business. Personal use is not deductible.
Advertising and Promotion
100% deductible as ordinary and necessary business expenses.
Employee Wages and Benefits
Wages and benefits given to employees are tax-deductible.
Vehicle Use
Deductible based on the standard mileage rate or actual expenses. The standard rate for 2023 is 65.5 cents per business mile.
Legal and Professional Fees
Fully deductible, including fees for lawyers, accountants, and consultants.
Office Supplies
100% deductible as long as they are ordinary and necessary for the business.
Business Meals
50% deductible, must be directly related to the active conduct of a trade or business.
Bank Fees
Fees from business bank accounts are deductible.
Licenses and Regulatory Fees
State and local licenses and regulatory fees are deductible.
Repairs and Maintenance
Costs for repairs and routine maintenance of business property are deductible, improvements are not.
Insurance
Business insurance premiums are fully deductible.
Charitable Contributions
Corporations can deduct charitable contributions up to 10% of taxable income. Sole proprietors and pass-through entities report contributions on personal tax returns.
Depreciation
Deduction of the cost of business property over its useful life according to IRS schedules.
Interest on Business Loans
Deductible if the loan proceeds are used for business purposes.
Health Insurance Premiums
100% deductible if the business owner is self-employed, not eligible for other employer-sponsored health coverage.
Business Interest
Interest on business debts is fully deductible. For tax years beginning in 2021, the limitation is generally 30% of adjusted taxable income.
Bad Debts
Business bad debts are deductible when you can prove the debt is worthless.
Taxes
Various business taxes are deductible including state and local sales tax, real estate and property tax, and employer taxes.
Retirement Plans
Contributions to employee retirement plans are deductible within IRS limits.
Start-Up Costs
You can choose to deduct up to 5,000 in organizational costs in the year the business begins, as long as total start-up costs are
Home Office
Deductible based on the percentage of the home used for business, under specific IRS rules.
Education Expenses
Deductible if they maintain or improve skills required for your current business.
Travel Expenses
100% deductible for business-related travel. Personal portions of travel are not deductible.
Rent Expenses
100% deductible for property rent used solely for business.
Utilities
100% deductible for the portion used in a taxpayer's home for business purposes.
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