As we enter mid-March, taxpayers start to get very
interested in deductions. Below are some that
you may have the right to claim.
Deductible expenses
Office expenses
Rent or lease payments
Advertising
Costs of goods sold
Insurance costs
Utilities
Payments to independent contractors [file form 1099]
Accounting fees
Legal fees
Communication expenses
Credit card interest for business charges
Travel expenses
Vehicle expenses
Business-related meals and entertainment
Uncollected accounts receivable
Bank fees on business accounts
Interest payments on notes
Consumption and fuel taxes
Labor taxes
Real estate tax paid on business property
Special local assessments for repairs or maintenance
commercial property
Promotional costs that generate goodwill, such as sponsorship.
a youth team
Expiration of the business association
Business related magazines
Casualty losses
Beverage services
Credit bureau fees
Taxi fares
Phone calls made on trips
Self-employment tax [if applicable]
Sales tax deduction option
The American Job Creation Act of 2004 provides
taxpayers with the option to claim a deduction for the state and
local sales taxes in lieu of state and local income taxes.
If you bought a high-cost item during 2004, you may find
that the total sales tax you pay far exceeds your state’s
payment of income tax. If so, you must determine whether
must claim a higher deduction using the IRS Optional
State sales tax tables found in IRS Publication 600.
The new sales tax deduction is a windfall for taxpayers in
Alaska, Florida, Nevada, Texas, Washington, South Dakota and
Wyoming. These states do not tax your income
residents, which makes the sales tax deduction very
valuable deduction indeed! Regardless, taxpayers in all
states should have the ability to claim a sales tax
deduction.
