The hardest part about being a new business owner is knowing what is considered a business expense and what is not. Often, some of the things you'd normally do or buy every day as an entrepreneur are something that could be a tax deduction later. Here are some general expense tracking tips to keep in mind when you are out and about.
Breakfast, lunch, or dinner for two: Is that person that you are eating with a past, current, or prospective client? If so, then it's very likely that you can write-off your meal as a business expense. Yes, you may be friends but even small things like having lunch is a great way of building and maintaining a client base.
That new piece of software: While you may be buying a new piece of software because it's the latest trend, if it can be applied to your business in any way then it may be considered a business expense. Even some mobile phone applications that manage your schedule, invoice others, or plan your trips can be expensed.
Books and training: Often, business books tend to get forgotten when it comes to tax write-offs. The reason being is because a lot of entrepreneurs find business books to be enjoyable and don't really look at them as something that's "strictly business." The same goes for training and other seminars. While they may be fun, they are also a part of personal and business development and can be included in your annual expense reports.
Networking events: While networking events are often expenses, a lot of entrepreneurs forget about them. Networking is a valuable part of building your business relationships and it can't be ignored. So just because you attend them on a regular basis doesn't mean that you shouldn't keep track of how much you spend (including food and drinks) at these events.
If you need a better way to keep track of all of these expenses, I suggest that you buy a receipt scanner. It will make your life much easier when it comes to tracking deductions. Basically, it will let you scan your receipts and store them digitally so you don't have to keep them stored in a shoe box.
There are many other items that can be expensed such as mileage, etc. However, the purpose of this article is not to provide an exhaustive list of items to write-off, it's meant to inspire you to take advantage of the deductions that you've earned by being an entrepreneur every year!
Breakfast, lunch, or dinner for two: Is that person that you are eating with a past, current, or prospective client? If so, then it's very likely that you can write-off your meal as a business expense. Yes, you may be friends but even small things like having lunch is a great way of building and maintaining a client base.
That new piece of software: While you may be buying a new piece of software because it's the latest trend, if it can be applied to your business in any way then it may be considered a business expense. Even some mobile phone applications that manage your schedule, invoice others, or plan your trips can be expensed.
Books and training: Often, business books tend to get forgotten when it comes to tax write-offs. The reason being is because a lot of entrepreneurs find business books to be enjoyable and don't really look at them as something that's "strictly business." The same goes for training and other seminars. While they may be fun, they are also a part of personal and business development and can be included in your annual expense reports.
Networking events: While networking events are often expenses, a lot of entrepreneurs forget about them. Networking is a valuable part of building your business relationships and it can't be ignored. So just because you attend them on a regular basis doesn't mean that you shouldn't keep track of how much you spend (including food and drinks) at these events.
If you need a better way to keep track of all of these expenses, I suggest that you buy a receipt scanner. It will make your life much easier when it comes to tracking deductions. Basically, it will let you scan your receipts and store them digitally so you don't have to keep them stored in a shoe box.
There are many other items that can be expensed such as mileage, etc. However, the purpose of this article is not to provide an exhaustive list of items to write-off, it's meant to inspire you to take advantage of the deductions that you've earned by being an entrepreneur every year!
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