22 Business Deductions You Might Overlook

If you own or manage a small business, you are probably well aware that you can deduct the ordinary and necessary expenses of operating the business. But did you know that the definition of “ordinary and necessary” business expenses comprises a lot more than the usual laundry list of personal computers, staplers and labor costs?

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If you own or manage a small business, you are probably well aware that you can deduct the ordinary and necessary expenses of operating the business. But did you know that the definition of “ordinary and necessary” business expenses comprises a lot more than the usual laundry list of personal computers, staplers and labor costs?

For example, here are 22 tax-deductible items you may easily overlook or ignore during the course of the year. The tax deductions for these expenses have been approved through various court cases, private letter rulings, IRS regulations or tax code provisions.

Of course, this list is not all-inclusive. Look through your records for business expense deductions that are out of the ordinary. Then check with a professional tax adviser to determine if the expense is tax deductible or not.
 
  1. Answering service and beeper(s) if you are required to be available as part of your job
  2. Audio- and videotapes that enhance your business skills
  3. Bad business debts to the extent they are worthless
  4. Bank service fees for business accounts
  5. Beverages and snacks for your employees
  6. Business interruption insurance
  7. Business travel incidentals such as laundry, airport shuttles, tips and so on
  8. Computer software
  9. Consulting fees you pay to outside experts
  10. Gifts to business clients (limited to $25 per recipient)
  11. Insurance premiums against casualty losses
  12. Internet service provider fees
  13. Legal fees paid in connection with business
  14. Long-distance telephone calls from home if made for valid business reasons
  15. Magazine subscriptions and other periodicals related to business activities
  16. Passport fees used for business trips
  17. Petty cash used for business-related expenditures
  18. Physical examination cost to establish fitness needed for a particular job
  19. Professional dues for business organizations
  20. Special clothing required for work (e.g., for safety reasons)
  21. Tickets to sporting events given to customers (limited to 50% of the cost)
  22. Union dues and similar assessments

Other articles in the June 2011 Edition of Business Matters: