A business expense needs to be "ordinary and necessary" for running the business, according to the IRS.
As an S-Corp, there are numerous business expenses that can benefit you by lowering your taxable income. While the "obvious" expenses are the payments directly related to your business, it is also important to be aware of expenses that are related to your business in some way, such as the business-use-of-home and your mileage.
A full list of business expense categories can be found here:
- Advertising
- Examples: gifts, marketing, signs, ads, social media, printing
- Auto & Truck
- Actual Expenses: Please note, mileage still needs to be tracked if vehicle is used personally as well! Taking this method can also depend on other factors, such as the ownership of the vehicle.
Examples: gas, maintenance, car washes,etc.
OR
- Mileage (See Business Mileage tab in Accounting)
- Actual Expenses: Please note, mileage still needs to be tracked if vehicle is used personally as well! Taking this method can also depend on other factors, such as the ownership of the vehicle.
- Bad Debts
- Bank Charges
- Business Insurance
- Business Meals (with clients)
- Continuing Education
- Examples: books, coaching, conventions/seminars, online courses
- Dues & Subscriptions
- Health Insurance Premiums
- Interest
- Licenses, Permits & Fees
- Office Expense (Business use of Home)
- Examples: mobile phone plan, internet, utilities, furniture, portion of repairs
- Office Supplies (not inventory)
- Parking & Tolls
- Postage (Delivery & Freight)
- Professional Fees
- Examples: accounting, legal, subcontractors
- Rent (Real Property)
- Rent (Car, Equipment)
- Salaries & Wages
- Security
- Taxes - State and local business taxes
- Taxes - Payroll
- Travel
- Examples: tickets, lodging, car rental, meals
Download Formations Expense Guide
Click here for in-depth information:
- Business deductions for self-employed professional: https://formationscorp.com/tax-deductions-you-can-enjoy-as-an-s-corp/
- How to track your miles? https://formationscorp.com/tracking-your-miles/
- What is business-use-of-home? https://formationscorp.com/business-use-of-home/
- 10 FAQ about business expenses: http://formationscorp.com/10-frequently-asked-questions-about-business-expenses/