I’m sure I don’t need to remind you, but the deadline for filing personal taxes is a little less than 3 weeks away. If you haven’t filed yet, we may have some tips for you regarding business deductions. Unfortunately, many people don’t realize they may be able to deduct business expenses, even if they are not a business owner. Why give any more money to Uncle Sam than required? Every little bit helps these days.
Business Travel. If you travel away from home overnight for business you can deduct the cost of travel, lodging, meals and “incidental” expenses.
- Tips and Gratuities. Tips to porters and hotel staff during business travel can be included in expenses which are part of the IRS allowed per diem.
- Business mileage. Even if all you are doing is traveling to Staples to get offices supplies for your boss, this is a legitimate deduction. Note: Commuting to your job is NOT deductible
- Airfare, hotel rooms and meals. All expenses incurred during your business travels can be written off through the standard business per diem deduction.
Business Deductions other than Travel. If you work from home or use your personal property to do work for your company, there are many deductions to take.
- Home Office. If you have a legitimate home office you can deduct the portion of all the appropriate expenses of maintaining your home — real estate taxes, mortgage interest (acquisition debt only), homeowners insurance, water and sewer, gas and electric, heating oil and depreciation if you own the home (or rent and utilities if you are a tenant) — that applies to the area of the office.
- Home Computer. The IRS, in Publication 529, tells us that you can only deduct a computer as an employee if it is (a) for the convenience of your employer, and (b) required as a condition of your employment. You cannot deduct a computer if its business use is merely for your own convenience.
- Cell Phones. Most companies pay for your cell phone plans and the cost of the phone itself. However, if you are using your personal cell phone for business, you may be able to write it off.
- Uniforms. The uniforms of firefighters, nurses, police officers, security guards and the like are deductible, as well as special jackets, hats, shirts and ties with a company logo, such as those worn by fast food workers and maintenance employees.
- You can’t file the 1040 EZ form and claim these deductions.
- It is advisable to seek the advice of a professional when claiming business deductions to make sure you are eligible to take them.
Even though it might take a little extra time to do your tax return, looking for these hidden deductions is worth it. Yes, I own my own business, but even before I did, I regularly claimed deductions as recommended by my accountant. Usually, I was to greatly increase my tax refunds.