Jacksonville CPA | Talking About Deductions
ey everyone, welcome to today’s podcast section. This is brandon, president of Mineva and appreciate you joining us today. If you don’t have a Jacksonville CPA and you’re looking for an accountant that can help you in your small business, then please give us a call. So today we’re going to take. We’re going to talk, excuse me, we going to talk.
Okay, about business deductions. So many people asked me, you know, I’m so confused. Can I adapt this? Can I deduct that? You know, um, I just want to make sure that I’m getting all possible deductions that I can [inaudible] well, you don’t have to worry about that. So just give us a call if you have a Jacksonville CPA that’s not giving you this information that just give us a call and we’ll help you out.
Business deductions. The irs says that you can deduct anything that is ordinary and necessary in your business operations. Jacksonville CPA So just keep that in mind, ordinary, necessary. So first off, I want to recommend, and this can get confusing and people have a hard time with this, especially if you’re just a one or two persons, a business, you need to keep your finances separate, your business and your and your personal finances need to stay separate so your business needs to have its own bank account and you need to have your own bank account personally and you do not need to commingle funds. So commingled means to mix together. So don’t pay for personal expenses out of your business account. Don’t pay for business expenses out of your personal account.
the receipt, create an expense report, turn it into yourself and get the business Jacksonville CPA to reimburse you. No problem. But I would recommend you going through these steps to make sure that, uh, you were not commingling funds. The irs does not look highly on that as well as a computer to get sued. And you were coming linked funds that is a possible grounds to pierce the corporate veil. Uh, and what that means is you get sued for something for one of your employees, something, one of your employees dead, you get sued and they pierce the corporate veil. If you have any assets personally, they can be at risk. So deductions, anything ordinary and necessary. So most of that stuff is a no brainer, you know, if you have an office rent or if he owned the building, depreciation and interest and taxes and payroll and office supplies and printer and telephone and internet and on and on and on. The list goes. So now where some people get confused as a lot of my clients are maybe maybe a consultant or a single member s corporate and they’re working out of their home. So you can take a portion of your Home Office expenses if you have an area that you exclusively and regularly use for business.
So you’re not supposed to do anything else in this area and you have to use it regularly for business. let’s just say that that area is 200 square feet in your house was 2000 square feet. That would be what, 10 percent of the total square footage. So you are allowed to take 10 percent of all expenses related to your home, lawn care, turn my protection, electricity, gas, water, any type of expenditure that you’re, you’re, uh, exposed to. Then you can take 10 percent of that that goes for rent if you’re renting your home or mortgage interest, property taxes. And if you do something directly to that room, let’s just say you put flooring or you paint that room directly, you get to take 100 percent of that deduction is not, you don’t, it doesn’t have to go through the 10 percent phase out.
there are items that are mixed use business and personal. This is a big one. So this is where you can take advantage of no operating a small business versus being an employee. You have your cell phone, for instance, like my cell phone, Jacksonville CPA I’m using my cell phone to record this podcast. So it’s a business expense. But I also used a cell phone to call my wife, so it’s personal, so it’s a mixed business, personal use, so I cannot take 100 percent of the deduction, but I can take an app, cool percentage with that APP percentages, I don’t know. It’s different for every person, so you just have to figure that out. Um, and the same goes for Internet service at the house. Some people, their businesses very internet heavy. So your percentage, your business use percentage would be higher than someone who maybe is not using the Internet that much.
computer purchase laptop, maybe you have a laptop that that’s family laptop, but you use it for business. Definitely take that percentage. Uh, another big one is travel. People say, well, I don’t know, I’m going to this conference, you know, but I’m going to go taking the kids and the wife and we’re going to go to Disney world too. Well that can be a little tricky, but you can still deduct a big portion of your vacation. So the rule there for travel is that the primary purpose of the trip asked to be business. You have to, let’s say for instance, you have a three day conference in Orlando and the next two days after that you’re going to spend time at Disney world. Well, your airfare to the conference as 100 percent deductible, the three days while you’re at the conference, the hotel is 100 percent deductible.
Your meals, you’re out of town meals, which is 50 percent deductible for those three days is 100 percent deductible. Now your, your wife, unless she’s a business partner with you, her, her plane ticket would not be deductible and the same with your children, but they’re staying in the same hotel as you and you can take the hotel expense for those three days. So I’m definitely some benefit there. Now the primary, if you’re just, if you have a vacation planned you, you want to go skin but you meet a business partner for lunch. Um, yeah, I don’t think that’s going to fly. The primary purpose of the trip was to go ski. Um, and the, the trip also, the majority of the trip needs to be business related. At least 50 percent of the trip needs to be business related. Uh, another one is vehicle expenses.
People say, well, should I take put the vehicle in my name or my company name? Jacksonville CPA You know, what do I keep all my gas receipts? You know, what does this mileage tracking thing I’m missing out on something there. So there’s two ways to keep it to deduct vehicle expenses. You can take mileage which, which basically means you keep track of all of your business miles. Thank you. Milo. Iq and quickbooks. Quickbooks APP has a great mileage tracker, keep track of volume, mileage, and the irs gives a standard mileage rate changes each year. I say it changed with gas prices, but I’m not sure if I believe that. And you take your miles driven times the moat, the applicable rate and there’s your deduction and you also can deduct interest if you’re taking the mileage, interest, parking and tolls. I believe it is if you’re taking the mileage method where the. Whereas the other method is actual. So gas repairs, tires, insurance on the vehicle, uh etc. Etc. Etc. So there’s a, the vehicle subject can be quite lengthy. All of thEse subjects can be quite lengthy, but I’m see we’re done here for this segment and we will be back.