Who doesn’t love a credit at our favorite stores? Maybe you returned something that didn’t fit, didn’t have time to shop for something else, and got a store credit. Maybe you forgot you had it. What a FUN surprise to discover said credit the next time you’re shopping! It’s basically free money, right?
So are our tax credits. My friend Nesha Pai of Pai CPA, LLC recently shared some great tips with me and I wanted to pass them along to you.
Hey Business Owners, The Top 5 Forgotten Business Expenses
- MILEAGE. Mileage to and from client locations, business meetings, networking events. These all add up. In 2018, it’s back up to 54.5 cents a mile. RACK UP! One caveat: It does not include miles to and from your office or work location commute. (Gas is not deductible, unless you have your vehicle on your books and you chose the actual vs. the standard mileage method).
- CELL PHONE. How much of your cell phone do you use for business? Is it 50%, 75%, more, less? Take that percentage and multiply it by your monthly bill and enter that in as an expense onto your books.
- MEALS. Business and networking meals are still deductible at 50%. (Just not entertainment anymore). Save your receipts and document who you were with!
- START UP COSTS. What are the items or services you bought before your business went live? Did you set up an LLC? Did you contribute your personal laptop? These are items considered as Owner Contributions and therefore expenses on your books
- HOME OFFICE. If you work from home, this is a big one most forget…In simplicity, add up all of your utility costs, HOA dues, and repairs & maintenance costs for the year. Take those amounts and multiply it by the fraction of the square feet of your office space to the total of the home.
The biggest question my readers will have is: Can I deduct my home mortgage? The better question, according to Nesha Pai’s latest blog is should you deduct your mortgage, and if so, what do you need to take to your CPA to get the tax credit. You can read more from Nesha’s professional site here.
If you decide you should deduct your mortgage, please get in touch with me and I’ll help you gather the paperwork you need for your CPA.
I hope these tips were of value to you. Please pass them along to your friends and family especially the business owners.
Now, if I could figure out how to make Gucci belts and Hermes bracelets tax deductible my tax season would be complete…