Many business taxpayers fail to deduct otherwise eligible business expenses or fail to fully deduct qualifying business expenses. Below is a listing of commonly missed deductions or deductions that you may not be fully utilizing. You may wish to carefully examine your records to determine if you may be missing any of these deductions.

*For Sole Proprietors/Filing Schedule C: Home Office Deduction: If you use part of your home as a home office, you may be entitled to deduct expenses related to the home office based on the percentage of square footage the home office occupies. Related expenses include mortgage interest, property taxes, utilities, and repairs, etc. (S Corporation shareholders and Partners in a Partnership usually cannot take this deduction.)
*General Business Expenses: If you use your personal funds for business expenses such as office supplies, these are qualifying business expenses, which you may deduct. You can fill out an expense report and have the business reimburse you. Keep all receipts attached to the expense report for supporting documentation.
*For S Corporation Shareholders: Imputed Interest on Shareholder Loans: If you have loaned money to your business, you are required to charge interest on the loan or interest will be imputed to you. While you are required to report the interest as income on your personal return, your business is permitted a deduction for the interest paid. If any of the interest amount is improperly characterized as wage income to you, your business may be overstating its employment tax liability. By recharacterizing these amounts as interest expense, your business may be able to reduce its employment taxes. (You should also have an official Note set up with terms, etc….)
*Meals and Entertainment Expenses: If you have used your personal funds to pay for meals and entertainment expenses, these expenses qualify as a business deduction, subject to limitations. Once again, fill out an expense report and have the business reimburse you. Keep all receipts attached to the expense report for supporting documentation. Also document the business purposes of the meals and entertainment expenses.
*Personal Assets Converted to Business Use: If you have contributed personal assets, such as a computer, the fair market value of these assets qualify as a business deduction, subject to depreciation limitations, beginning with the date of conversion.
*Self-Employed Health Insurance: As a self-employed taxpayer, you may deduct your health insurance premiums under certain circumstances. (check with your tax professional for further information)
*<Communications Expenses: Expenses related to the business use of your personal telephones, cellular phones, and internet connections may be deducted.
*Automobile Expenses: Mileage and other related automobile expenses may be deducted when your personal vehicle is used for business purposes.