Wednesday, January 15, 2014

WHAT YOUR BUSINESS CAN DEDUCT - 2014



Business Owners can deduct four broad categories of business expenses. 

1. Start-up Expense
2. Operating Expense
3. Capital Expense
4. Inventory 



You can only deduct expenses incurred. You need to keep records of these expenses to (1) Know how much you actually spent (2) Prove to the IRS as evidence that you really incurred such expense in the event of an IRS Audit and it doesn't matter whether you work from home or from a fancy office.

1. Start Up Expenses: Expenses you incur to get your home business up and running - such as licensing fees, advertising cost, attorney and accounting fees etc. However, start up expenses are not currently deductible which means you may not be able deduct all of your start up expense in one year.

2. Operating Expenses: Ongoing day-to-day cost a business incurs to stay in business. This include rent, utilities, salaries, travel expenses, repairs and maintenance. These expenses are currently deductible which means you can deduct all of them in one year.

3. Capital Expenses: Capital assets are items you buy for your business that have a useful life of more than one year, such as equipments, vehicles, books, office, furniture, machinery, and patents you buy from others. Depreciation and Section 179 rules may apply. Call us.

4. Inventory: If your home business involves making or buying products , you will have an inventory. This includes almost anything you make or buy to resell to your customers. You can deduct inventory cost separately from all other expenses. Inventory that remains unsold at the end of the year is a business asset not a deductible expense.

Owe the IRS and need help? Free Consultation (713)300-3965 or contact us via web www.advancetaxrelief.net.
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