One benefit to owning a business is the ability to write off business expenses. Here are the current business expense deductions you can take when you file your taxes for 2021.
Advertising and Marketing
The cost of advertising materials like flyers or business cards, newspaper and TV ads, and influencer marketing campaigns are just a few of the examples you can deduct at 100% in this category.
Bad Business Debt
Business debts deemed uncollectible or worthless can be written off up to 100%, depending on if it’s partially or fully considered unrecoverable.
Business Casualty Losses
If the business owns property damaged during a natural disaster or civil disturbance, or a victim of burglary or vandalism, you can write off 100% of the losses.
Business insurance policies that are necessary and ordinary, like general liability, professional liability, and worker’s compensation, are deductible at 100%.
You can deduct 100% of business loan interest, including real estate mortgages and lines of credit.
You can deduct up to 100% of business meals. Client meals and office snacks/meals are 50% deductible while a company-wide party and meals while traveling can be deducted at 100%.
Business Car Use
You can deduct the cost of owning or leasing and maintaining a business vehicle at 100%. If you use your personal vehicle for business, you will have to track mileage and take a mileage deduction, which is currently 57.5 cents per mile.
You can write charitable donations made to a qualifying organization off 100%. Just be sure to get a receipt, especially if you’re paying cash.
If you own a business asset used to generate income, you can deduct 100% of the assessed value as depreciation on your small business taxes. This includes computers, office furniture and other machinery and equipment.
Taking classes, subscribing to professional publications, and attending industry seminars are a few ways you can take the 100% education deduction for your small business.
Foreign Earned Income Exclusion
A U.S. citizen or resident alien who pays taxes on foreign earned income can write off 100% for qualifying money.
If you are self-employed, a contractor, freelancer, or telecommuter, you can write off the home office square footage in your home as long as it’s used 100% for business. This includes part of your homeowners insurance, utility bills, and repairs.
Internet and Phone Expenses
If internet and phone expenses are crucial to your business, you can write them off at 100%, including cell phone and in-flight internet purchases.
You can write interest that accrues on money borrowed for investments off 100%. Annuities, dividends, interest and royalties are examples of deductible investment interest.
Business related legal fees are 100% deductible, even if you don’t win your case.
Relocation and transportation expenses spent to move your business are 100% deductible.
Office supplies can be written off for a 100% deduction if used in the current tax year. Examples include ink, printers, pens, paper, cleaning supplies, and computer software used to conduct business.
If you rent a business property, office space, or a parking garage for your business, you can deduct 100% of the rental costs on your taxes.
Money put in retirement vehicles like 401(k) and IRA are 100% deductible as long as they are tax-qualified retirement accounts.
Salaries and Expenses
Employee salaries, PTO, bonuses, and commissions paid to your staff are 100% deductible.
You can write costs incurred to start or buy a business off up to $5,000, including training, marketing, and travel.
Ordinary and necessary travel outside the business owner’s residential state can be deducted at 100%, including parking and tolls, taxis, lodging, and meals.
If you have any questions about what expenses can be deducted for your business on your tax return, check with your accountant. If you need help with accounting and bookkeeping, JStevens is accepting new clients and would be happy to go over your taxes with you!