Ryan Vaughn covers 15 business deductions most people miss: vehicle mileage, equipment, cell phones, meals, health insurance, education, legal fees, subscriptions, office supplies, internet, and travel. The key rule: every expense must be ordinary, necessary, and tied to your business, paid through a business account, and documented clearly enough to explain to an IRS auditor.
Commonly missed tax deductions. Let me share with you a few of what those are. But first, let me just say, in general, a deduction that you can claim on your tax return is going to be something that is related to your business, that helps your business maintain or improve The tax code specifically uses 4 words. It says if it's ordinary, necessary, helpful, and appropriate. Now those 4 terms are pretty vague, and that's why I just say, look, if you're spending a dollar, can you relate it to your business? Then it's a business expense and you should pay for that expense out of your business account or on a business credit card. Now, a business credit card can also be listed in your personal name as long as you're exclusively using it just for business purchases. So here's a couple ideas of things that you want to make sure you don't miss. How do you write off your vehicle mileage? This is often overlooked. We also have a link to a separate training I did on vehicle mileage, so look at that in the description below. There's equipment, and obviously computer stuff. Most of the time that's, people are like, oh, that's obvious. But what other type of equipment are you buying that is related to your business that you might not realize? So that, you know, let's not miss out on those. Phone, if you have a separate business line, that's obvious. But your personal cell phone, you conducting business on that? Very likely. Now if you have a family plan, it gets a little bit more complicated, but there are strategies that you can do to employ your family, which then makes the family plan a better chance of being able to write off. But that is a little bit past the, the depth of what I'm trying to go over here. Just know that that's a possibility for you. Postage, buying stamps, mailing things, Eating out. If I'm having a business discussion with food and somebody else who isn't my spouse, there's that rule, then I should be writing that stuff off. Insurance. As the owner, sometimes we overlook the fact that our health insurance is a tax deduction. Now there's a very specific way to pay for that insurance in your business. You want to make sure that it's Getting paid from your business account, that you're claiming it on your W-2 if you're an S corp owner, and that you're claiming it as an adjustment on your personal return. So it's kind of a 3-step process. Continuing education. Any expense that you have that helps you maintain or improve your skill set is a write-off. Anything that— any money you're spending in order to maintain your current status and level as a professional or whatever certification you have, that's also a write-off. Legal and professional fees, interest expense, dues and subscriptions. Now dues and subscriptions is a little bit more generic, but does my subscription to something constitute business? Like for me, I read on Audible, for example, I have an Audible subscription. And I only use that for business books, books that will help me improve my skill set. If I have personal reading, so like for example, I'm a fan of the author named Brandon Sanderson. If I'm buying or reading a Brandon Sanderson book, I'm physically buying that separate. I don't use my Audible for that. So what kind of monthly subscriptions do you have that are tied to your business? Office supplies, internet, that includes home internet. I mean, that's just a common, you just have to have that expense nowadays in order to function. And then travel. If I'm going somewhere for business purpose, and that business purpose existed before I planned or spent money on the travel, then that's a write-off. We also have in the job, in the job, in the description below, A link to further information we've provided on travel and how to write that off as well. So hopefully this gives you some ideas of some commonly missed or underutilized tax deductions. Remember, it comes down to intention. Is this related to my business? And if it is, am I paying for it like it is related to my business? And in the case, in the rare case that you might have to present to an IRS auditor why you claim that as an expense, would it make sense? If you're telling the story out loud, does that seem logical? Then chances are it's a business expense. So remember that, take advantage of this, lower your taxable income. Profit is a choice, have the courage and wisdom to choose it.
