Common Missed Business Deductions

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Each year it seems harder to comply with the increasingly complex federal, state, and local tax regulations facing small businesses. This may lead to not only filing late or incorrectly, but also possibly over-looking applicable tax deductions and overpaying the IRS. Here are some commonly missed business deductions to keep track of:

·        {C}{C}Home office deductions: any space in the home that is used for business, and nothing else, can be deducted come tax time. Either an entire home office or a portion of a room is deductible.

·        {C}{C}Auto expenses: a vehicle used for business allows for deductions related to the costs of operating and maintaining it. If the vehicle is also used for personal reasons, a portion of the expenses are still deductible depending on how much of the usage was for business.

·        {C}{C}Travel expenses: the direct cost of travel, as well as the associated costs of living on the road, is 100% deductible when travel is for business-related reasons.

·        {C}{C}Meals and entertainment: when traveling, 50% of meals are deductible; when not traveling, meals are deductible when a client is present to talk about business.

·        {C}{C}Insurance premiums: for those who are self-employed and paying for health insurance coverage on their own, while ineligible for any other insurance, insurance premiums are 100% deductible.

·        {C}{C}Bad debt losses: bad debts are not a complete loss; if the debt owed was previously reported as gross income, and there have been reasonable attempts to collect, some bad business debt may be eligible for a deduction.

·        {C}{C}Charitable deductions: gifts given to charitable organizations throughout the year qualify for deductions, as well as any out-of-pocket expenses acquired when doing charitable work.