With a small business, what can be written off with taxes?
Topic: writing business
July 20, 2019 / By Janna Question:
I began selling AVON back in Feb. As tax season is approaching, i'm just trying to figure out what can be written off? I did make something of a profit (approx $10k.) I read several places things like gas, cell phone, lap tops etc. can be written off as business expenses, could someone please outline what's acceptable to be written off so I dn't do anything wrong?
Best Answers: With a small business, what can be written off with taxes?
Etheldreda | 3 days ago
I wrote some articles linked below that answer your question. Please read them.
Michael Plaks, EA, Houston TX
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As much as possible, for sure. But if you've never done anything like this before, then take advice from an accountant and get yourself on as many of the free business start-up courses that are run in most areas. Aside from the networking opportunities, you can usually gleen a lot of useful tips from the experts that run them. Keep records and receipts for everything that is remotely connected with your business. You can also claim a proportion of domestic costs for running a home-office if you operate that way. Get some proper advice early on, that way you don't have to waste valuable time back-tracking to sort out problems later. Good luck!
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Mileage for visiting your customers to take orders or deliver them can be deducted. You must keep a daily log through the year of ALL of your mileage on your vehicle, noting how many miles were personal, how many commuting if any, and how many business.
A cell phone is only deductible if you have a separate cell phone just for business. If not, the only thing that's deductible is any separately billed business long distance calls.
Is your laptop used only for business? Or do you also use that same laptop for personal use?
Money paid to Avon for product or other things is deductible.
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"I read" is not reliable unless you were reading an IRS publication.
As Judy pointed out, lack of records will kill some deductions, particularly vehicle expenses. The IRS requires a usage log for a personal computer as well.
Please see a professional before you deduct anything you aren't sure of.
On $10,000 of income--if you are single and that's all you made--most of the tax is from self-employment tax, not income tax anyway.
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I'll assume you are in the US. You can only write off certain portions of things for work. You cannot just write off you entire gas bill for the month, you need to have specific mileage. You can also deduct wear and tear on your person vehicle, based on miles traveled.
If you only have one cell phone, I would go through the bill and see what percentage of the calls were work calls. Then deduct that percentage of the bill from your taxes.
There are lots of things you can deduct. I would start using an accountant if I were you.
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Originally Answered: !5 year old small business?
Well I don't think you're old enough to get a business license, so I don't think you can become a genuine legal business entity. However people offer their services all the time without having to be an actual "business" because they don't market their services as a business. In college the first thing you learn in small business 101 is that 9 of 10 businesses fail in the first year. Most of the time it's due to poor planning. I would suggest you read up a lot on business planning and marketing before you invest in any venture. Also make sure their is a demand for the service before hand. Every joe and his brother knows how to work on computers, and they'll undercut your prices in a heart-beat to steal your customers. Personally I wouldn't get into that business.