Tax Deductions for Sales Reps
From medical supplies to insurance to food distribution, companies use sales representatives to get their products and services into the hands of potential clients. Depending on the company and the type of sales, a representative can be a W-2 employee or a 1099 independent contractor. When you file your yearly income tax, you can lower you taxable income by deducting certain business expenses associated with your sales work.
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Business Use of Home
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Sales representatives often have a home office to perform work outside of the office. You can deduct a portion of your rent or mortgage if your home office is used exclusively for that work and your employer (if you have one) doesn’t provide a place for you to work. Determine what percentage of your home your office takes up and deduct that percentage of your home payment.
Office Supplies and Equipment
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Whether you have a home office for your sales business or not, you likely buy supplies and equipment to help with your work. Everything from pens to paper to printers can be deducted from your taxable income as long as you use it exclusively for your sales work. You should keep receipts for these types of deductions, because while you don’t have to submit them with your tax returns, you must keep a copy for your tax records.
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Business Meals
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Sales reps often have to wine and dine their clients or prospective clients. Meals or other entertainment events that are associated with your business or your sales clients are deductible as a business expense. You can take up to 50 percent of each event as a deduction. This is another itemized business deduction that requires you keep detailed receipts for your records.
Mileage
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Sales representatives often do a lot of travel for business. Whether you’re driving to a conference out of town or visiting clients locally, business use of your vehicle can result in a deduction. Keep track of your mileage by keeping a log in your car of the miles your drive for business. When you prepare your income tax returns, you can take a deduction for each business mile you traveled in your own vehicle.
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