Some Deductible Business Expenses (Part 1)

You can deduct the expenses of the business if it is operated in order to make a profit. The expenses of your business are a calculation of what it takes to execute your trade or business. In order to be able to deduct that expense, it must be both ordinary and necessary – one which is a norm for your trade/business and one which is appropriate/helpful for your trade/business.

Remember, business expenses are not capital expenses, personal expenses or expenses used to figure the cost of sold goods. The following are the deductible expenses that you can file for this tax season:

The costs of goods sold: This includes storage, direct labor costs, the cost of raw materials or products and factory overhead. This applies if you have a business which manufactures products or purchases them to resell them.

The capital expenses: We mentioned these costs before and they are costs which go toward your investment in your business, but you can only deduct or amortize a few of these costs.

The personal versus business expenses aren’t usually deductible because you can’t deduct personal, living or family expenses. You need to divide the total cost between the business and personal expenses.

The business use of your home: This allows you to deduct certain expenses for the use of your home, such as mortgage interest, utilities, repairs, insurance and depreciation.

The use of your car for business: You will be able to deduct the expenses based on the actual mileage of the car.

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