10 Small Business Expenses That Are Tax Deductible

A lot of small business owners don’t take tax planning seriously. It is overwhelming and it is a boring topic so a lot of people avoid it. It is a very easy predicament to get into and just say “I’m not gonna talk about tax, I’m not gonna worry about it, and if I do, it will be that one time in a year when I call my account manager to do my taxes”. The sad part is that it’s a big mistake you’re making because it is a large expense on small business and if we don’t take it seriously and do better planning, it can cause the collapse of your business.

It is also something that can create a lot of stress for you, therefore it is sad that most people don’t take it seriously and give it the attention it deserves. So many people sadly do not take advantage of those basic deductions in small business that they are allowed to. The provision in the tax law says that if those basic deductions are related to business so we can write them off.

Business deductions are company expenses, generally you pay tax on your business’s profit not revenue, so if you make $10 and have expenses of $4($10-$4=$6) you only pay taxes on $6, this means that the more expenses you record the less taxes you will pay.

It doesn’t matter whether you’re just starting or you are an established entrepreneur, saving thousands of dollars is absolutely achievable through tax deduction. Below are the 10 small business expenses that are tax deductible;

  1. Vehicle Expenses: You’ll have to purchase/pick up supplies, find new locations, drop off supplies, don’t forget you have to pick up lunch for yourself and your employee. 

    The cost of gas or fuel consumed during pick up or supply can be deductible. The cost of fuel consumed during visits to client for meeting is not left out as well

  2. Admin Expenses: Admin expenses such as business license, certification, and entity formation, not to forget business insurance could be written off by keeping a detailed record of them. 
  3. Home Office: This has to do with cost associated with running the business from your home some home expenses are completely deductible if only you are working from home, a portion of your rent, mortgage interest, utilities such as; electricity, water, gas, trash, sewer, HOA fees, maintenance or home repairs and even home improvement. These expenses based on the percentage of the square footage in your home used exclusively for business. 
  4. Operating Expenses: There are things that entails running a business efficiently, such as supplies, the cost of advertisement that involves creating promotional materials; radio advertisement, Facebook advertisements, banner advertisements and yellow pages are absolutely deductible. 
  5. Travel Expenses: You can write off a part of the flight fare that you spent to and from a business trip. The meeting with the customer, vendor, a conference, maybe an annual corporate meeting, the money spent on laundry, Lodging, fax charges. Thus your travel should include record of the money you spent on a business trip. 
  6. Dinning: Make sure you’re tracking all those meals by yourself when you are traveling or when you’re talking business with someone. 
  7. Technology: Your gadgets, yes, you need that gadget for your business; your smartphone, laptop. Internet charges form your ISP, phone Call charges are deductible if it is frequently used to contact your customers or clients, and money spent on these are completely deductible. 
  8. Materials for educational purposes: Books bought for educational purpose, to learn new skills or improve on an existing skill that would have direct influence on your business. The fee paid for a professional program/course that is related to your business are completely deductible. 
  9. Employee Expenses: Of no doubt, most small business owners have employees which are paid on monthly basis, at such, wages paid to them are deductible. Your income should be reported IRS in order to deduct your employee business expenses. 
  10. Assets/Equipment: These are the items that are used over and over again anytime your business is open for customers. The equipment you use on daily basis and the cost of its maintenance can be deductible.

Are Prenuptial Agreements Affected by Changed Circumstances?

A Prenuptial Agreement is a contract between two capable adults and the terms of the contract are not to be revised. However, the terms become a point of contention when the adults concerned are in the process of invoking its terms.

It is important to note that contracts between two individuals who are married or are to be married is much different to a contract for goods or services and thus is not contract attorney work. The New Jersey Supreme Court case, Lepis V. Lepis, made a vital loophole where people could make additions in prenuptial agreements. The changes enabled modifications of family support provisions, regardless of whether they were ordered by the Court or stipulated by the parties. For these changes to be made, there needs to be a substantial and relevant change in position. The changes in position are to be unforeseen, significant and long-lasting. The powder keg language of Lepis reads as follows: “Contract principles have little place in the law of domestic relations.” However, divorce lawyers must note attention to five key points.

First, suitably constructed prenuptial agreements are given presumption of validity. In other words, the parties were independently represented by legal counsel, no coercion or duress in agreeing to the terms, there was suitable level of financial disclosure, and that the contract was fundamentally fair. When one party wants to enforce the terms of the contract, there needs to be evidence that shows the contract is in some way unacceptable by the party inquest to avoid enforcement. Or else, the prenuptial agreement should be imposed.

Second, a prenuptial agreement will not be considered to be unacceptable unless it can be proved that the result of the enforcement will be a drop in a standard of living for any party that is extremely below that which was enjoyed before the marriage.

Third, following the Supreme Court’s finding in Lepis, divorce attorneys came up with the idea of incorporating anti-Lepis clauses into their property settlement agreements. These kind of clauses can be used for all prenuptial agreements. This can avert alimony obligations, or can ostensibly limit them in the event of divorce. But the anti-Lepis clause can be the subject of an adjustment motion. Unfortunately, sometimes these clauses are enforceable, and sometimes they are not; it would be best to consult a specialist such as a contract litigation attorney.

Fourth, Marchall v. Marchall is a good read for those who wish to contest a New York ante-nuptial agreement. In this instance, the Court stated that ante-nuptial agreements should be viewed as subject to adjustment by reason of “changed circumstances” in the same manner as property settlement agreements.

Fifth, Pacelli v. Pacelli must also be examined where a mid-nuptial agreement was drafted 11 years after their marriage and after having two children. The Appellate Division refused to enforce this agreement. The Appellant’s finding was that the agreement was unfair when it was entered into in 1986 and likewise unfair when enforcement was sought in 1994. The Court did not believe that such mid-nuptial agreements should be dealt the same way ante-nuptial agreements are dealt with. The Appellate Division opined that “the dynamics and pressures involved in a mid-marriage context are quantitatively different.”

Prenuptial agreements that are effected under circumstances without coercion or duress and where the requirements of the Uniform Premarital Agreement Act are met, Lepis should not apply, and the agreement should not be altered. The only exception would be under the inconceivable standard of the act. Nevertheless, that is the exact same standard that was used for modification of New Jersey matrimonial agreements prior to Lepis, under Schiff v. Schiff.