Business Deductions

Business Deductions

Productions stage

Capitalize amount spent at the productions stage and depreciate it over a period of time.

Personal vs. Business

Personal expenses are not deductible.

Business Deductions

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business.

  • Car & Truck Expense  – Actual vs Mileage rate
  • Salaries & Wages – No need for W2 for schedule C or partnership – income subject to self-employment.
  • Contract Labor – Employee Vs. Contract Labor – Form 1099-Misc instead of W2 for contract labor
  • Rent on business property
  • Depreciation – Non cash – one of the reason for real estate investment
  • Supplies
  • Utilities – Electricity, Water, Trash, Gas
  • Taxes – Payroll taxes (940, 941, TWC), Property taxes
  • Business licenses and permits
  • Meals & Entertainment – typically 50%
  • Business use of your home – These expenses may include mortgage interest, insurance, utilities, repairs and depreciation.
  • Interest
  • Insurance
  • Business start-up costs – State filing fee, Attorney costs
  • Cost of goods sold – Inventory
  • Telephone charges – % of business use or identify individually
  • You child’s salary – There is no social security tax when you hire your child who is 17 or younger and you can deduct the salary as a business expense.
  • Social security and schedule C – Form 1120S conversion
  • Retirement plan contributions. – SEP, IRA
  • Equipment – Computer, Printer, tools etc.
  • Furniture – Desk, Chair
  • Advertisement
  • Travel
  • Legal & Professional fees
  • Utilities

Expenses you can’t deduct

Personal expense

Federal income tax payments

Lobbying expense

Penalties & Fines you pay when you break the law

Political contributions

 

 

 

 

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