Tax Tips for Businesses

It’s December and you just finished a wonderful Thanksgiving holiday, and now it’s on to holiday shopping and giving thanks for a healthy and prosperous year and an even better New Year’s!

This time of the year we like to remind business owners of the many tax advantages and deductions that are available to them.

The IRS allows all business deductions that are “Ordinary” and “Necessary” for your business.  To keep track of business expenses, we generally recommend that you have a business banking account and make all business purchases out of that account, either with a check or a debit card.  You can download banking and credit card transactions into QuickBooks software to make tracking business expenses much easier.

We also recommend that you never co-mingle business expenses with personal expenses – in other words, only pay business expenses out of the business bank account.  If you have rental properties, you should have a bank account for each property.  If you need help with getting monies out of the business account to pay personal expenses, please give us a call.


Auto expenses – make sure to keep a log and track all mileage.  The IRS generally will disallow deductions without the log.  You can get a mileage log at any office supply store.

Meals & Entertainment – make sure you keep all receipts and/or credit card and bank statements.  You should always write down who you met with and what topics were discussed.

Rent, utilities, and other office expenses – always pay these from your business bank account.

Depreciation – This is the expensing of a capital asset.  In other words, if you purchase a piece of machinery for $10,000, you might deduct $2,000 a year for five years (OR) you might deduct the entire purchase in the first year.  Generally, depreciation can result in thousands of dollars of tax savings.  Since depreciation is a complicated calculation with many IRS rules to follow, we recommend you meet with us before the end of the year for tax planning so we can help you structure this deduction.

Maybe Santa will put a new car under the tree and you can depreciate it up to $25,000!  Happy holidays!!!

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