Tax Deductions

Let’s talk about taxes. 

Wait! Don’t run away! I promise to make this clear and simple. 

This post is meant for informational and educational purposes. It is not tax, legal, or financial advice. As always, Business by the Book recommends that you consult with your CPA regarding any tax questions. 

Why should I care about tax deductions?

Write-offs - or tax deductions - lower how much your final tax bill will be. These tax-deductible expenses are deducted from your total revenue, giving you your taxable profits. 

Total Income - Tax Deductible Expenses = Taxable Profits

The more tax deductions you have, the less you are going to pay in taxes. The great thing about working with Business by the Book is we manage all of this for you. We categorize every single transaction exactly as it should be. This allows your CPA to easily find your deductions and file your tax return with absolute clarity. 

Aren’t all my business expenses tax-deductible?

Nope. Definitely not. The IRS defines a tax deduction as an ordinary and necessary expense for running your business. 

Ordinary - meaning a typical business expense, like advertising, marketing, office supplies, etc. 

Necessary - meaning you have to have it to operate your business. 

So those Atlanta Braves season tickets you used to write off as client entertainment. No such luck anymore. We can still consider them business expenses, but under the new tax law, those tickets are no longer ordinary or necessary, so they are not tax-deductible. 

So what is deductible? 

Okay, this list is pretty long. But if you familiarize yourself with this list, you can best make financial decisions to invest your money in tax-deductible ways. Does the thought of managing your tax deductions make you want to pull your hair out? Contact us! We would love to help you manage your bookkeeping so that this is one less thing on your plate.