What are common business deductions?

Business expenses are the cost of carrying on a trade or business. Deductible business expenses (business deductions) are those that are ordinary and necessary which were paid (cash basis) or incurred (accrual basis) during the year. 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.

Business deductions are usually tax deductible if the business operates to make a profit. Tax deductions are valid business expenses that you claim on your taxes. Claiming these business deductions saves you money by reducing your taxable income, so you pay less in taxes to the government.


Business deductions

The following is a list of common business deductions:

  • Accounting
  • Advertising & promotion
  • Bad debts
  • Bank fees
  • Charitable contributions
  • Cleaning
  • Commissions
  • Computer services and supplies
  • Continuing education
  • Credit and collection costs
  • Dues and subscriptions
  • Equipment
  • Gifts (for business)
  • Insurance
  • Interest on loans
  • Janitorial
  • Licenses and dues
  • Legal and professional fees
  • Meals & entertainment
  • Office expenses
  • Parking and tolls
  • Postage and mailing
  • Rent
  • Repairs and maintenance
  • Research expenditures
  • Salaries and wages
  • Security
  • Start-up expenses
  • Supplies
  • Taxes & licenses
  • Telephone
  • Tools
  • Training
  • Travel
  • Uniforms
  • Utilities

For help in determining your allowable business deductions and with all of your bookkeeping needs, call us at GRA CPA.

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