![]() ![]() Tip #1: Set up your expense accounts to reflect your business Here are a few ways to make the process a bit easier. Remember, if you’re looking for investors, outside financing, or need to create financial projections, you will have to have an accurate estimate of your regular business expenses, categorized properly. It’s really quite simple to categorize your business expenses, but many small business owners put this process off until it’s absolutely necessary, creating more work in the process. How to categorize expenses for your small business Utilities: The cost of your gas, electricity, and water is a completely deductible expense.Travel: Any business related travel is deductible, whether it’s local, national, or international, as long as it’s considered necessary for your business.Telephone: Whether it’s a state of the art phone system or cell phones for your field reps, the cost of your phones is completely deductible.Salaries and other compensation: Employee salaries as well as any wages paid to contract employees is completely deductible.Rent: If you rent office or retail space, the rent is deductible.Printing: Whether it’s a one-page document, or a booklet for your customers, the cost of printing is deductible.Postage and shipping: The cost of shipping orders or simply mailing a letter is a deductible expense.Office expenses and supplies: This includes things such as pens and pencils, file folders, toner for your copier, and ink cartridges for your printer.Maintenance and repairs: Whether it’s for routine maintenance like HVAC servicing, or replacing cracked tile in your reception area, maintenance and repairs are deductible.Insurance: General liability, worker’s compensation, product liability, and disability insurance premiums are deductible.Employee benefit programs: The cost of employee health insurance or retirement benefits such as a 401(k) match is fully deductible.Dues and subscriptions: Subscription costs to publications related to your business are deductible, as are membership dues for professional organizations.Credit and collection fees: If you need to use outside agencies to collect past due balances, you can deduct that.Continuing education: Thinking of going back to school to learn the latest in your field? That’s deductible. ![]()
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