As the old saying goes, “you gotta spend money to make money”. The topic of expenses and deductions is likely a major part of your meetings and discussions with your CPA (if you don’t have a CPA, read this) in these first months of 2019. In this article, we’ll list five business expenses to discuss with your CPA as you plan for your 2018 tax filing day.
Membership Fees In Professional Clubs & Organization
This deduction only applies to clubs and organizations that are directly related to your profession (trade organizations, etc.), not golf clubs or airline clubs. These fees would be reported on either Schedule C or Form 1065, depending on your business type.
Employee Education & Training
Any costs incurred in keeping yourself and your employees current on the best practices in your industry is important and – fortunately – deductible on your business taxes. This is considered a “fringe benefit” for your employees and are reported on either the Schedule C, Form 1065, or Form 1120, depending on your business type.
Though income tax payments are never deductible, there are a number of taxes that are deductible. For instance, you can deduct portions of your payroll taxes (typically only the employer portion), license taxes, import or customs tax, and taxes on business-related travel expenses.
Business Debt Interest
You are also able to deduct the cost of interest on business debts, though this has been limited by the 2017 tax reform. For 2018, companies who have an annual gross income of at least $25 million are only able to deduct up to 30% of their EBITDA.
Costs for advertising and other marketing activities are deductible, along with any meal costs or entertainment at public events for marketing purposes. It’s important to note that advertising costs are not selling costs. Discuss this deduction with your CPA if you have any questions.