When hiring the latter, make sure to issue Form 1099-MISC to any such contractor to whom you pay at least $600 in 2017. Contract Laborĭepending on the nature of your business, you may hire employees full-time or part-time or use independent contractors. To learn more about costs that you can deduct, capitalize, or amortize, refer to Chapters 7 and 8 from Publication 535. You also have the option of amortizing or deducting certain business start-up costs. Capital ExpensesĬertain business expenses, such as business start-up costs, business assets, and business improvements, have to be capitalized instead of deducted. Consult Publication 587 for more details. One best practice for filers of Form 1040, Schedule C is to use the area used regularly for business as a percentage of the total area of home to allocate allowable deductions on Form 8829. Business Use of Homeīootstrapping operations making use of home space for business purposes may be able to deduct eligible home expenses, such as mortgage interest, depreciation, insurance, utilities, and repairs. For more details, consult Topic 510 from the IRS. However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use. If you use your car in your business and you use it only for that purpose, you may deduct its entire cost of operation, including insurance and maintenance costs, up to the applicable limit. Most owners of small businesses can deduct business miles driven on Form 1040, Schedule C or Form 1040, Schedule C-EZ Business Use of Car In 2017, you can deduct 53.5 cents per business mile driven, down from 54 cents in 2016. It pays off to keep track of how far you drive for business purposes. For more information on reporting business bad debts, consult Chapter 10 from Publication 535. This is why it’s a good idea to keep track of your accounts receivable throughout the year. Good news: you can now deduct that amount as a business bad debt. Bad Business Debtīad news: you can’t recover the last 10% on a sale made on credit to a client. Regardless of the medium (TV, radio, online, mail-in), keep all receipts of promotional campaigns for your business. On line 9 of Form 1040, Schedule C, you can fully deduct reasonable advertising expenses that are directly related to your business activities, such as gearing up for Small Business Saturday. To help you minimize your tax liability, here is a list of 20+ small business tax deductions. Everyone’s favorite day of the year is right around the corner: Tax Day 2017 is Tuesday April 18.
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