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The Don’ts of Small Business Deductions

September 12, 2019 by OSYB Staff

As the end of the year draws closer, you may want to stock of your small business expenses that you think fall under small business tax deductible items. ” Sometimes, it’s because of the nature of the expense—many investments self-employed people make are considered capital expenses and are just not tax-deductible—but, other times, it’s because of confusion over the new Tax Cuts and Jobs Act. These new tax laws went into effect for the 2018 tax season and changed a myriad of long-standing rules that applied to individual income tax and business tax.”

Intuit Small Business blog writer, Cathie Ericson, after connecting with a few accountants, shares some items that fall under the category that small business owners often think are tax deductible but are not:

  • Extravagant customer gifts – only $25 per customer is deductible
  • Volunteer time – you can only deduct gas and any other travel expenses, such as parking or tolls, if you do your work or attend meetings onsite. Note that the standard mileage rate for volunteer work is different than for business use—at .14 per mile for charitable organizations, versus .58 per mile for business use. You also can deduct expenses if you travel out of town for a board meeting, for example.
  • Daily commute expenses – commuting each day expenses are non-deductible neither is parking. Driving expenses to a client site or a meeting can all be included on your taxes at the $.58 per mile driven.
  • Clothing costs – clothing or cleaning clothes is not deductible, unless you are business traveling and need clothing cleaned. An exception is required uniforms that you pay for.
  • Meals for employees – used to be 100% deductible now only 50% deductible.
  • Business travel expenses for spouses
  • Entertainment – business meals are 50% deductible but not business entertainment expenses.
  • Social memberships dues – are not deductible but dues for professional business memberships are deductible.
  • All marketing costs

There are quite a few intricacies involved and it is always appropriate to consult your tax professional as soon as possible to avoid any surprises at tax time.


For full article and more details: Tax pros warn Small Business Owners not to try to deduct these 9 expenses

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