Tax Deductions and Your Small Business

Read "Ordinary and Necessary" Business Expenses for more details on business expenses.

If

you have a home-based business or a home office, you can also deduct a percentage of your residential real estate taxes, utilities and telephone expenses. In addition, your auto, meal, travel and entertainment expenses may be deductible if they relate directly to your business. Read IRS Advice on Business Use of Your Home for more information.

Finally, here's a friendly reminder: Always maintain complete and accurate business records to document your deposits, income, expenses and deductions. If the Internal Revenue Service audits your business, it may require you to demonstrate that each entry on your tax return is correct.

Tax laws change annually, and they can be very complex. Always consult your accountant or tax attorney for assistance, strategies and recommendations for your individual situation.