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Keeping track of all of the small business tax deductions that are available can be challenging. Here are a few of the most frequently asked questions associated with small business tax deductions.
1. Can I Deduct Gifts?
Many people mistakenly believe that they can deduct the entire amount of the gifts that they provide to clients. While you can deduct part of this, the entire amount is nondeductible. According to the IRS, only the first $25 of each gift to a client is deductible. This means, but you can only count $25 for each client that you give something to over the year. Therefore, you should not try to deduct the entire amount of the gifts, as this will signal a questionable deduction for the IRS.
2. Are Educational Materials Deductible?
Another common question that people have is whether or not they can deduct educational materials associated with their business. You can deduct books and magazines, as long as they had to do with your particular trade and count them as office expenses.
3. Should I Save Small Receipts?
Many people think that they should not save smaller receipts. Regardless of how big the purchases, you will have to provide the IRS with some kind of information about it. Receipts are an easy way to keep track of all of your purchases.
