From the Nolo Business & Human Resources Center
Top Ten Tax Deductions for Professionals
by Attorney Stephen
Fishman
Don’t pay more in taxes than you need to.
If you’re a professional, no one needs to tell you that taxes are one of your
largest expenses. The IRS doesn’t make a point of advertising ways to lower your
taxes and it certainly won’t complain if you don’t take all the deductions
you’re entitled to. In fact, many professionals miss out on all kinds of
deductions every year simply because they aren’t aware of them -- or because
they neglect to keep the records necessary to back them up.
Here are the top ten tax deductions that every professional business owner
should know about.
1. Business operating expenses. This includes all your ordinary and
necessary business expenses -- the bread-and-butter costs virtually every
professional incurs for things like rent, supplies, and salaries. If you don’t
maintain an inventory or buy expensive equipment, these day-to-day costs will
probably be your largest category of business expenses -- and your largest
source of deductions.
2. Business entertainment. Many important business meetings, client
contacts, and marketing efforts take place at restaurants, golf courses, or
sporting events. The tax law recognizes this and allows professionals to deduct
half of the cost of their business-related entertainment. However, taxpayers
have abused this deduction in the past, so the IRS imposes strict rules limiting
the types and amount of entertainment costs you can deduct.
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