Business EntertainmentĪlmost all business entertainment cannot be deducted for tax purposes. To be considered 100% deductible, the expense must be made available to the general public (if you have coffee and snacks that would be given out if you meet with clients) or a social or recreational activity for the benefit of the employees (a holiday party or a summer outing), for example. For tax years beginning in 2018, all food is 50% deductible unless it falls into a certain category. However, if there is a business reason for having any of your employees eat at work, their meals can be deductions. Meals for you are not included in this category. Snacks and CoffeeĪ little known tax write-off often overlooked is the cost of providing yourself and any employees with snacks while working – if needed while working. The optional method requires no additional record keeping. The deduction is $5 for every square foot of your home office, up to $1,500 per year. An alternative calculation is available, known as the simplified home office deduction. If you rent your home, you may also write off a portion of your rent. You may also be able to deduct a portion of your mortgage interest, homeowner's insurance, repairs, and painting. For example, if your office takes up 15% of the house, you may be able to deduct 15% of each utility, such as gas and electric, as office expenses. The way it is deducted is based off its size relative to the rest of the house. It cannot also be used as a spare bedroom for out of town guests. Home Officeįor an office in your home to be considered a qualified deduction, it must be used solely for business. Supplies and materials definitely lands a spot as one of our top write offs for independent contractors. Even greeting cards sent to clients can be a deduction. It's not commonly known that books, magazines, and newspapers related to your business are also deductible. Even the lesser items like paper, pens, and ink are a deduction. Items like a computer, camera, printer, or other office machinery, used on the job are tax deductible (with special depreciation elections). Supplies and MaterialsĪlmost any items you need to conduct business can be written off. Business cards you have made are another potential write-off that falls under occupational operating expenses. If you work from home, you can have a shared internet account for both home and business use and deduct a portion of the monthly cost for business purposes, or you can have a separate business account (we recommend a separate business account if possible as it avoids challenges with allocating use between personal and business). Web hosting fees and the cost of internet services are also operating expenses. The cost of advertising yourself, your services, or your products would fall into this category. While there are many tax benefits of being an independent contractor, here are our suggestions as the top 10 potential write-offs for independent contractors. Your deductions should include all necessary and ordinary expenses associated with your work. It's in your best interest to be aware of the items you can write off as a cost of doing business. The IRS does not step in to correct your return should you fail to claim a deduction for which you are qualified.
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