As we enter mid-March, taxpayers begin to become very interested in deductions. Following are a few that you may be entitled to claim.
· Office expenses
· Rent or lease payments
· Costs of goods sold
· Insurance costs
· 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 receivables
· Bank fees on business accounts
· Interest payments on notes
· Excise and fuel taxes
· Employment taxes
· Real estate tax paid on business property
· Special local assessments for repairs or maintenance to business property
· Promotional costs that create goodwill such as sponsoring a youth team
· Business association dues
· Business-related magazines
· Casualty losses
· Beverage services
· Credit bureau fees
· Taxi fares
· Telephone calls made on trips
· Self-employment tax [if applicable]
Sales Tax Deduction Option
The American Jobs Creation Act of 2004 provides all taxpayers with the option to claim a deduction for state and local sales taxes instead of state and local income taxes. If you purchased a high cost item during 2004, you may find that the total sales tax you pay far exceeds your state income tax payment. If so, you should determine whether you should claim a larger deduction by 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 the income of their residents, which makes the sales tax deduction a very valuable deduction indeed! Regardless, taxpayers in all states should the possibility of claiming a sales tax deduction.
Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.