Self Employed and it's Tax Season

It is tax season and it can feel like you are in a whirlwind, especially when you are self employed. If you are like me you are looking at your expenses from 2015 and thinking how do I group my deductions and can any of my personal expenses or fixed costs go toward my tax deductible?

 

Expenses paid or incurred during the taxable year while conducting business or trade can be deducted from your tax return. So what does this really mean?  It can be the difference from owing additional funds or receiving some major benjamins. Incase you're wondering what are the most common writeoffs are here is a list for you review or put on your shopping list.

 

Expenses

The good news is when you own your own business some of your personal expenses could be deductible if they are connected to your business. Potential deductions could include medical insurance, liability insurance, and automobile expenses. A portion of your self-employment tax is decidable and you have the option to set up an IRA.

• Office phone bills {can be a cell phone or a hard line}
• Internet
• Repairs to office equipment
• Liability insurance
• Medical Insurance
• Self-Employment tax
• Office rent and utilities

Supplies

As a self employed Real World Woman {or Man} you can deduct the costs of new personal property {except for cars} purchased for your business. Now I recommend you clear this with your accountant, but there is no limit to deductions for your office supplies, which includes furniture but equipment is deductible up to a point. And here is some more exciting news, if you work from home your home office deduction is $5 per sq foot and up to $1,5000. Click here for more information on the IRS website.  

• Desk and Chair
• Business Cards
• Office supplies
• Printer Ink
• Lightbulbs
• Cleaning supplies

 

Travel

If you travel for business your travel related expenses are deductible. You may be able to deduct your car expenses for the wear and tear. Some people use the actual milage or you can use the standard mileage rate. Click here for the IRS’s Standard Mileage Rate. In addition travel, includes your ticket on a plane, boat or train to your Uber ride. Something that we tend to miss and forget are the extra fees that are tacked on for the extra checked bag or if your bag is over the weight limit.  

• Extra baggage fee

• In-flight internet
• Hotel
• Airfare, Train Ticket or Boat ticket
• Uber or the old-fashioned cab
• Subway ticket

 

Meals and Entertainment

 

This deduction can get harry. Remember that the purpose of the meal is to actually conduct business, and champagne brunch with your besties will not count as a write off. Be honest, save your receipts and even document who accompanied you to the lunch, happy hour or game. If you are traveling then your meals are deducted without a client or a brainstorming lunch. You might want to set a per diem amount for your meals and entertainment to save yourself from filing all of the receipts.

 

The Techy stuff

The techy side of you can write off the devices or services you use.  The fixed cost of things like your cell phone {if used for business} and your internet will fall under expenses but the purchase of your fancy new iPhone would fall under supplies, got it?  Any of the subscriptions or software you use such as; QuickBooks, Google Business or Libsyn are eligible for your deductible

• Subscriptions
• Software
• Computers
• External hard drives
• Printers
• Copiers
• Camera
• Chargers
• iPhone
• Tablets or iPads

 

Now that you have the 101 on your tax deductions you are all set. PS. I want to remind you to contact your account for specific questions, concerns and needs as he or she will be able to further advise you in the best possible way.

***Photo by Jessica Proulx