Doing taxes is a dreaded but necessary chore for any business owner. In order to complete taxes correctly, it requires extensive recordkeeping, attention to detail and a thorough understanding of regulations and rules regarding tax filing. Between complicated tax codes and expense records, it can be difficult to know exactly what you can write off to reduce your overall tax burden, and often it’s best to seek professional tax help in Des Moines, IA. Thankfully, there are guidelines that you can follow to maximize your write-off potential while still ensuring that you are following the rules and regulations set in place by the IRS:
- Ordinary and necessary: In order to deduct an expense, it must be something that is considered both ordinary and necessary. In other words, you don’t want to report any outrageous deductions that weren’t directly helpful to your business. You should make sure that any deduction is related to the specific business that you are operating. If you run a law firm, for example, the money that you spent on a bouncy castle rental would not be a reasonable thing to deduct, despite its potential ability to boost office morale. A dinner with a potential client, on the other hand, would certainly qualify as an ordinary expense.
- Directly business-related: Although it may go without saying, any expense that you are planning on writing off as a deduction should be directly related to your business. Any item that you buy and deduct from your taxes must be used for your business in some way. Although you cannot deduct items that are solely for personal use as a business expense, you can write the item off if you use it for business in some way. For example, if you purchase a new personal computer and you use it to answer work emails or perform work-related tasks, you can deduct it as a business expense—if it is used half the time for personal use and half the time for business use, you can deduct half of the cost of the item, and so on.
- Reasonable amount: It is important that the business expenses you deduct are not outrageous or lavish. For one thing, you should never claim a deduction that is more than the amount that you spent on the item or expense. In addition, the IRS tends to be a little more stringent when it comes to expenses that may be considered over-the-top, such as entertainment or extravagant meal expenses. With this in mind, you should ensure that you are only making reasonable deductions. If you’re unsure about what deductions are considered reasonable, it’s wise to seek professional tax help in Des Moines, IA.
Get tax help in Des Moines, IA
For professional tax help in Des Moines, IA to help you navigate the complicated world of tax filing, contact Accounting & Tax Professionals, PLC. We have years of experience working with clients who need assistance with their personal or business tax filing. No matter what kind of questions you have or what you need assistance with, we are more than capable of offering you comprehensive tax help. Give us a call today to speak to one of our outstanding tax and accounting professionals.