Our only speaker today was Lori Sandam of Denver West Bookkeeping in Golden, Colorado. Today Lori wanted to discuss common deductible business expenses. Small business owners often incur many business expenses that are fully deductible against their business income. Many owners are not aware which are fully deductible, partially deductible and not deductible for their federal tax purposes. So Lori started going over the different expenses that a business owner can deduct. The first deductible items that she went over were the fully deductible items. Any expense which is ordinary and necessary for your trade or business is deductible under Section 162 of the Internal Revenue Code.   Lori went over some of the items that are totally deductible such as:

  • Accounting Fees
  • Advertising
  • Bank Charges
  • Business Licenses and Permits
  • Continuing Education
  • Delivery Charges
  • Insurance
  • Maintenance and Repairs
  • Legal and Professional Services
  • Postage
  • Rent
  • Software
  • Utilities
  • Contract Labor
  • Salaries and other compensation
  • Internet Subscriptions, domain names and web hosting
  • Taxes
  • Travel

Lori, then discussed some deductions the are only partially deductible:

  • Gifts – are deductible up to 25.00 per person and gift items that cost 4.00 or less are fully deductible
  • Automobile Expenses – Actual  expenses or business mileage are dependent on vehicle ownership
  • Home office – Must be your primary residence and only office for your business
  • Meals and Entertainment – only 50% is deductible

For further information on the items that are only partially deductible, refer to the IRS publication 463 – Travel, Entertainment, Gift and Car Expenses. For those with a home office can refer to IRS publication 587 – Business Use of Your Home. Or if you don’t have the time give Lori a call and she can help you understand the complexities of deductions for your business. Lori took the last of her time to go over those expenses that are not deductible at all. A few of these are:

  • Bribes and Kickbacks
  • Contributions to Political Parties or Campaigns
  • Dues and Memberships Fees for social clubs
  • Penalties and Fines

Lori would like you to use this information as a reference – not as tax advice. If you have any questions that you need answered about your business accounting and tax situation don’t hesitate to give Lori Sandam and Denver West Bookkeeping a call!

Lori Sandam * Denver West Bookkeeping * 720.999.4797 * lori.sandam@gmail.com