Gear Up For Tax Time! Uncommon Tax Deductions

As business owners across the country gear up to prepare their annual tax filing, most are scrambling for ways to reduce their tax liability. The obvious deductions are well, obvious; but make sure you include the not-so-obvious deductions as well. As always, if you question whether an expense is deductible, check with your tax professional to cover your assets.

Nontraditional Consultants
Businesses often will pay an attorney for services, a marketing firm for advertising and even the carpet cleaning for routine office maintenance. What about all of those other services you paid for – are they deductible too? Tax deductions are feasible for services such as a speech coach to improve public speaking skills, an information technology consultant for improving the computer software and hardware, a mediator to settle a dispute with a client or amongst company owners – these are all reasonable tax deductions.

Feed Your Employees
Supplying food and beverages to your employees is also tax deductible – as long as you are not charging for them. This should not be taken to the extreme limits by treating all of your employees to lunch daily, but snacks and beverages supplied are considered “de minimis” by the Internal Revenue Service. The IRS defines “de minimis” as “a benefit for which when considering its value and frequency with which it is provided, is so small as to m ake accounting for it unreasonable or impractical”. These expenses also can include occasional use of copy and fax machines, holiday gifts, flowers, fruit, books or other gifts provided under special circumstances.

Staying Fit
Even though you cannot deduct the cost of a gym membership from your taxes, if you choose to add athletic facilities to your work location for employee use, it may be a tax deduction. The three basic rules applied to this tax deduction: it must be operated by the employer, located on his property and is primarily used by company employees.

Wine and Dine Them
Entertainment expenses are tax deductions as well. Business entertainment expenses are deductible as long as the primary purpose of the expense was business related such as dinner with a client or potential client, or coffee with an investor. Entertaining for business is deductible by 50 percent of the total amount spent. After all, the IRS figures you as the business owner must eat anyway so you can pay for yourself.

Music To Your Ears
And finally, do you hear that? That sound of background music playing in the office around you. That too is a tax deduction, including the stereo system on which it plays.