What Can I Write Off for Business Expenses?
Deductible business expenses must be both ordinary and necessary, according to the Internal Revenue Service website. Ordinary expenses are expenses that are common and acceptable in the type if business you have. Necessary expenses are ones that are helpful and appropriate for the particular business you are running. Expenses do not have to be indispensible to be deductible, according to the IRS.
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Home Business
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If the business is conducted from your home, according to the IRS, you may be able to deduct part of your mortgage, interest, insurance, utilities, repairs or depreciation. In order to take advantage of this option, the business part of your home must be used exclusively for the business or trade. Your home must be the principle place of business, the place where you meet with customers, clients or patients or the business must be conducted in a separate structure that is not attached to you home.
Automobiles
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Motor vehicles used in the commission of your business are eligible for business expense write-off. However, if you use the vehicle for both business and personal use, you must divide expenses based on actual mileage. Commuting expenses are not included in deductible expenses.
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Tools
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Tools associated with your business are deductible if they are parts to help keep a machine in working order or if they are tools that will be used in the commission of your business.
Net Operating Loss
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If your income for your business is less than the deductions for the year, you can lower your taxes by using a net operating loss.
What Can't Be Deducted
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Business expenses must be distinguished from capital expenses, personal expenses and expenses used to figure costs of goods sold, according to the IRS.
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