You can deduct business expenses on your tax return.
For example, you can deduct costs associated with the business use of your vehicle. Other deductions include operating from a home office, business travel expenses, and charitable donations.
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is important to separate business expenses from the following expenses:
The expenses used to figure the cost of goods sold,
Capital Expenses, and
You must be careful when claiming small business tax deductions. Each deduction has a specific set of rules you must follow. Also, you cannot deduct personal purchases. An accountant can help you iron out which deductions your business is eligible for and how to claim them.
If you need help contact LUIS JOEL VAZQUEZ, CPA PA, we can assist you!