May 20

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To Deduct Or Not To Deduct

By Mimi Maclean

May 20, 2021

2021 business, Bench accounting, Bench bookeeping, business, business owner, small business, tax deduction, tax season

Brainstorming over paper
Photographer: Scott Graham | Source: Unsplash

One of the perks of having your own business is being able to deduct business expenses from your income. If you are not doing this, you are missing the boat and you are leaving lots of money on the table. But the question is what to deduct ……It can be a bit confusing so I compiled a list below. I use Bench which helps me go through each item and tells me how to categorize it and if it is deductible. If you haven’t tried Bench, you are missing out! It has changed my life. No longer do I have to stress about my books….It is seamless, personable, and VERY reasonably priced. Best yet, you get 20% discount on your first 3 months when you click here.

WHAT YOU CAN DEDUCT

Technology Costs

  • Software such as Later, Active Campaign
  • Website Costs to hosting, domains, anything you pay to keep your website running
  • Apps or services such as Zoom, Skype, Google,

Office space

  • Rent for office space or if you work from home see note below

PO Box

Shipping Costs Related To Work

Legal and Accounting Fees

Subcontractors for web design, social media, etc. (Don’t forget to get a W-9)

Interest on Business Credit Card or Loan

Marketing Costs (This could be digital marketing, social media expenses, in-person events)

Travel (Airplanes tickets, hotel, car rentals, Uber)

Car Mileage

  • You receive a certain amount of money for every mile you drive. This is always changing so you will need to ask your accountant and KEEP TRACK!!

Office Supplies

Business Insurance

COGS (If you are selling a product, any costs associated with selling that product.)

Continue Education

  • My favorite is expenses incurred for continuously learning. This includes seminars, summits, online courses, business websites, magazines, and books.

Banking Fees

Prizes for Contests

Partial Deductions

Meals

Gifts To Clients

Phone and Internet Charges

  • Only the percentage you use for business which if you are like me is 24-7!!

Your home for office rent

  • You can only do this if you have a designated office area and it is not used for anything else. You can have your accountant explain “The Simplified Option for Home Office Deduction”. It lets you deduct $5 for every square foot of home office space, up to 300 square feet, for a maximum deduction of $1,500.

Things You Can’t Deduct

Clothing

Your blowout for your big meeting!

Anything that is strictly personal use.

Mimi Maclean

About the author

Entrepreneur and Angel Investor Mimi MacLean brings you business strategies, life experiences, lessons learned, inspiration, and advice for you to be your best Badass Entrepreneur Self.

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