Self Employed Business Deduction Quick Reference

With several new self-employed clients this year I have been having the business expenses conversation with some frequency while preparing their tax returns for the first time. To help clients get a head start, I put together the following quick reference and figured I would post it for other business owners to use similarly. It is not intended to be a comprehensive list and you should consult your tax advisor and all of that other fun disclaimer stuff.

Startup Expenses

• Market survey

• Product analysis

• Visitation of similar businesses etc

• Consultant fees

• Travel costs to find suppliers, distributors, customers

• Incorporation and legal fees

Costs of Promoting Business

• Advertising

• Marketing

• Website

• Mailings

• Gifts for customers (limited)

Meals and Entertainment

• Work-related meals & entertainment (limited)

• Networking (dinner/drinks with potential referral partners/clients)

• Meals for subordinates (pizza etc)

Travel

• Mileage (or actual) to a work location other than regular location

• Travel expenses for job-related education (conferences etc)

• Tolls and parking Fees related to business purpose (non commuting)

• Passport if necessary for business travel

Dues and Fees

• Dues or fees for work-related organizations including union dues

• Regulatory or licensing fee for profession

• Bank Fees

• Payment processing (credit card/ACH) and collection fees

Subcontract Labor

• Freelance Labor

• 1099

Insurances

• Malpractice insurance

• Errors and omissions

• General liability insurance

Professional Advice

• Fees for tax preparation or advice

• Legal and accounting

• Consultant

Physical Location

• Home Office IF part of the home is used regularly and exclusively for work

• Office Rent

• Office furniture

• Parking spaces

Property and Equipment

• Computers

• Software

• Small tools or equipment required to perform work

• Depreciation of capital purchases

• Interest paid on business property financing

• Cost of repair and maintenance of business property

Utilities

• Internet - Business use only

• Second phone lines/cell phones for business use

• Electric, water, gas

• Trash pickup and shred

Operational Expenses

• Office and work related supplies

• Copy and printing expenses

• Postage, shipping and delivery costs

• Answering service

• Safety items, such as protective eyewear or steel-toed safety shoes

• Specialized clothing designed for job (not suitable for everyday wear)

• Dry cleaning costs for uniforms or protective clothing (not everyday clothing)

Books and Publications

• Subscriptions to professional journals, magazines, books for your trade or profession

Education and Research

• Educational expenses- to maintain or improve skills required in performing present job (conferences etc)

Important Non-Schedule C

• Health Insurance

• Pension Contribution

For more information check out:

https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses

http://www.jamesdance.com/deductions.htm

http://www.bankrate.com/finance/taxes/dozen-small-business-deductions-1.aspx

https://www.sba.gov/blogs/startup-cost-tax-deductions-how-write-expense-starting-your-business

http://www.forbes.com/2010/02/16/tax-deduction-mba-education-personal-finance-robert-wood.html

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

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