How to Calculate General Business Expenses

Depending on what type of business you are in you may be able to calculate business expenses that are deductible on your taxes. General business expenses that can be deducted include rent, car expenses, home office, computers and other business equipment. The following will help you calculate your business expenses no matter what your business is.

Instructions

Difficulty: Moderate

1. Drive your car and deduct some of the expense. If you are self-employed and only drive your car for business, you can deduct all the expenses relating to it. However, if you only use the car for business some of the time, you need to calculate the amount you can deduct. For example, if you use it 25 percent of the time for business you can claim 25 percent of the costs for business expenses.
2. Use your home for business. If you use a room in your house as a home office, you can deduct some of your home expenses as business expenses. If you have 8 rooms in your home and one of them is exclusively used for business you can deduct 1/8 of your home's expenses as business expenses. However, if you use the room for other things besides business, you may only deduct the part that is used for business. In other words, say you have a home office and use it 10 percent of the day for business. You would then calculate your home expenses, take 1/8 for the room and multiply that by 10%.
3. Deduct your office equipment. Again, to figure out how much is deductible for your office equipment you need to figure the percent of the time you use them for business. If you only use your computer and printer for business, you can deduct the total expense for these as business expenses. However, if any of the time is used for personal reasons you must calculate the amount of time and take a percentage of the costs.
4. Handle the daily costs. If you are an employee of a company, there are still expenses that can occur that are business expenses. Some of these are union dues, office equipment if you need to supply your own, uniforms, your car if you use it for business purposes and travel expenses if you aren't reimbursed.

Tips & Warnings

• Don't forget to include the cost of your electric and gas if you are deducting expenses for a home office.
• Keeping good records will help you to claim business expenses.