During the 2019 tax season (the filing cycle for this year’s taxes), new tax reforms are proposed to do away with deductions for un-reimbursed employee business expenses. However, if you are a business owner, you will still have the option of deducting business expenses. But which ones? Take a look at this list courtesy of Pacific Tax & Financial Group. After reading the information below, if you have questions feel free to contact us by phone at (760) 471-2040 or via our online contact request form.
Smartphone usage for business purposes is a legitimate cost. You may deduct the price you paid for the phone as well as any monthly service costs. However, you will need to calculate the time you use for phone for business versus the time you use it for personal matters. Typically, this is done by percentage (i.e. 40%, 50%, 75%, etc.). If you use your smartphone exclusively for business, you may deduct all of the costs on your tax return if you are self-employed.
Computers, laptops, notebooks, tablets.
The IRS mandates that your business expenses are customary, necessary, and reasonable to be eligible for deduction. So depending on your type of business, it may be possible to write off technologies such as computers, laptops, and tablets if you have regular business uses for them. Regular business use would obviously differ according to industry and technology needs. For instance, a freelance writer would likely need to use a laptop or pc to create content. Whereas a cosmetologist would need to substantiate the use of a pc.
Do you travel and work for your business? If so, any internet expenses that you incur while working at a hotel, on a plane, or train is tax deductible.
Business software that is used mainly for business can qualify for the deduction. Again, the software must be necessary for your business to qualify. If the software is used partly for personal reasons, figure out the percentage of the time it is used for business to calculate the proper deduction.
It is always best to stay ahead of your taxes and to develop a tax plan if you are a business owner. Do you need assistance in this regard? If so, contact us at your earliest convenience. Pacific Tax & Financial Group assists business owners in Carlsbad, Escondido, Fallbrook, Oceanside, San Marcos, San Elijo Hills, Valley Center, and Vista, California.