I’ve seen mention of classifying purchases as a business expense, and im not certain how it works. what benefit is it to have something be a business expense, and what are the actual qualifications for something counting as one? (I am in the us but it would be interesting to see how this works in other countries as well)
In: 5
As an “S corp” I am required to have a yearly meeting with all my shareholders, despite the fact I am the only member of the entire corporation. So, once a year I take my ex out (she has a business degree) to a nice dinner, and I write it off as a business expense.
I also have to get my taxes done by a CPA (by law) for $500, have liability insurance ($600) and pay licensing fees ($125), then I throw in all the materials and gas I bought, oil changes and repairs, and claim value lost on vehicles and tools that depreciate with time. Work boots but not clothes (unless I get them printed as a work “outfit”), safety glasses and sunglasses but not prescription glasses, my phone, laptop and smartwatch, but not my work radio.
I don’t get the money back, but I don’t pay income taxes on it either. Without the write off, I’d pay about $30 in income taxes on each $100 because being self employed kinda sucks. Because I am my own employer, I pay double for social security and medicare.
Latest Answers