Always track your small business expenses during the year.

Do not wait until year end, but spread out the time tracking your expenses to reduce stress and improve accuracy. Below we have listed some great ideas of what to track.

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Advertising:

Includes expenses for marketing materials, digital ads, and promotional campaigns.

Car and Truck Expenses:

If you use a vehicle for business, you can deduct either actual expenses (fuel, maintenance, etc.) or use the IRS standard mileage rate. Proper records are required. Report the end of year total miles driven (and a breakdown of business miles versus personal miles)

Depreciation:

Deducts the value of long-term business assets like equipment over their useful life. Section 179 allows full deductions for some assets in the year of purchase. Talk to your tax professional if you made any large purchases over $500. Depreciation is an item only the tax professional tracks

Office Expenses:

Covers items like postage and office supplies.

Supplies:

Items consumed / used in the day-to-day running of the business, such as cleaning materials, small tools and equipment or other miscellaneous small ticket items

Travel and Meals:

Includes business-related travel costs like lodging and airfare. Meals are partially deductible at 50%.

Utilities:

Deducts business-use costs for electricity, water, and internet services.

Employee and Contract Labor Costs:

Wages, temporary labor, and associated benefits are fully deductible.

Insurance:

Includes liability, property damage, and employee benefit-related premiums. For health insurance, track this separately and talk to your tax professional about if this is deductible.

Home Office:

If a portion of your home is exclusively used for business, related expenses (e.g., rent, utilities) can be partially deductible.

Interest and Loan Costs:

Deducts interest on business loans but not the principal repayment.

Record Keeping:

Maintaining accurate records, receipts, and documentation throughout the year is crucial to substantiate these deductions if audited by the IRS. For specific cases or complex categories, consulting a tax professional is advisable.