• Facebook
  • Youtube
  • Twitter
  • LinkedIn
  • Flickr
  • Slideshare
  • Rss
  • Donate
  • Subscribe
SBDC Tampa Bay
  • Home
  • Solutions
    • Certifications
      • Business Certifications
      • Minority-Owned Business
      • Woman-Owned Business
      • Veteran-Owned Business
    • Consulting & Training
      • Training
      • Training Calendar
      • Consulting
      • Schedule a Consultant
    • Business Solutions
      • Growth Acceleration
      • Government Contracting
      • International Trade
      • Starting Your Business
      • Disaster Preparedness
      • Student Teams
      • Organizational Development
  • Resources
    • Business Resources
    • Frequently Asked Questions
  • Insights
    • Blog
    • Media Inquiries
  • About Us
    • Mission / Vision
    • Consultants
    • Meet the Staff
    • Meet Our Clients
    • Partners / Affiliates
  • Training
    • Training Calendar
    • On-Demand Training
  • Results
    • Success Stories
    • Economic Impact
  • Locations
    • Tampa
    • Hillsborough
    • Hernando County
    • Pinellas County
    • Highlands, Hardee, DeSoto
    • Polk County
    • Manatee
    • Sarasota
  • Contact
  • Schedule a Consultant
  • Search
  • Menu Menu

Archive for category: Blog

Deducting Business Expenses

Blog, Finance, Human Resources

Deducting Business Expenses

by Simplice Essou, CPA | November 30, 2022

In this article we will discuss common business expenses that are deductible and a few that most taxpayers do not always think about when it comes to business expenses.

What is deductible?

According to the IRS: “The general rules for deducting business expenses: A business expense must be both ordinary and necessary to be deductible. Business expenses are the costs of carrying on a trade or business, and they are usually deductible if the business is operated to make a profit to be deductible.”

In other words, any expense that is necessary to produce business income is deductible if it is ordinary according to industry practices.

The following expenses are deductible:

Cost of Goods Sold

A manufacturing entity or a retailer that maintains inventory for resale can deduct the cost of goods sold. This cost is calculated by taking the inventory at the beginning of the year, adding the purchases throughout the year and subtracting the end of year inventory.

Salaries and Benefits

A business with employees can deduct the expenses associated with salaries and benefits.

Work-Related Travel Expenses

Expenses incurred for travel for business are deductible. These expenses include airfare, hotels, car rental, food and tips.

Work-Related Car Use

A business can deduct business-related car expenses. Business owners can choose between the mileage method and the actual cost method. On July 1, 2022, the IRS increase the mileage rate from 58.5 cents per mile to 62.5 cents per mile.

Business Insurance

Business insurance is a deductible expense. If the business owner has a home office or uses a portion of the home for business, renter’s insurance costs are deductible as business home office write -offs.

Home Office Expense

Business owners often overlook home office expenses. To qualify for a home office deduction, the space used as a work area must be exclusively for business and it has to be use regularly as the principal place for conducting business. Business owners may choose one of the two following methods to determine the deduction amount:

  1. The new method called the Simplified method is pretty straightforward. Under this method owners can deduct $5 per square foot for up to 300 square feet. Therefore, the maximum deduction under the Simplified method is $1,500.
  2. Under the Regular method the calculation considers the ratio of the area used for the business in relation to the square footage of the whole home. This percentage is then applied to the expenses such as rent, interest on the mortgage, and utilities.

Other deductible expenses include expenses for telephone, computer and Internet access, office expenses, and health insurance, just to list a few.

Depreciation

The tax laws allow businesses to depreciate the cost of assets over the life of the assets. For example office furniture can be depreciated over seven years (their useful life) and autos can be depreciated over five years. Therefore, every year the business can deduct a fifth of the cost of the vehicle as depreciation expense. This can result in substantial tax savings.

Another tax saving strategy is to use Section 179 of the tax code that allows for the one-time depreciation of a qualified asset if it is put into service before December 31. For example, a business owner can purchase a piece of equipment for $50,000. If it is purchased and put into service prior to the end of the year, the whole $50,000 can be deducted instead of being deducted over seven years. This strategy can result in substantial tax savings in years where revenue is high.

By keeping good records and knowing what expenses are deductible the business can help reduce their tax bills and keep more money in the business.

Author

Simplice Essou

Simplice Essou, CPA

Certification Consultants, Consultants, Essou, Tampa

Florida SBDC at USF
Specialty: Accounting, Business Planning, Financial Management, Startup

Simplice Essou joined the Florida SBDC at University of South Florida in March 2020 as a business consultant, bringing almost two decades of experience in accounting, finance and entrepreneurship. Essou started and managed an international consulting firm in 2008, specializing in advising African government on issues related to small-to-medium-enterprise development. Previously, he has worked for large corporations, including Bank of America, BP-Amoco, General Electric, and Lehman Brothers. These roles gave him a wide breadth of experience, including the ability to handle forecasting, analyze revenue entries, actively communicate account receivable risks, and lead day-to-day analysis and reporting for credit losses. He earned an MBA in finance from the Wharton School at University of Pennsylvania and a bachelor’s in accounting from the University of Southern Mississippi.

Read more
https://sbdctampabay.com/wp-content/uploads/2022/07/Simplice-Essou.jpg 800 800 admin /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png admin2020-05-29 13:08:572022-07-26 00:56:22Simplice Essou, CPA
https://sbdctampabay.com/wp-content/uploads/2023/02/Deducting-Business-Expenses.png 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:40:392023-02-03 13:21:13Deducting Business Expenses

Benefits of Global Entry for the International Traveler

Blog, International Trade

by Selma Canas, CGBP | November 23, 2022 Global Entry is a game changer for international travelers by saving time and reducing stress when clearing customs in the U.S. If you travel abroad frequently and do not like waiting in lines, then you should consider the Global Entry program. Global Entry is a program of […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/Benefits-of-Global-Entry-for-The-International-Traveler.jpg 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:37:082023-02-03 12:37:08Benefits of Global Entry for the International Traveler

Gain Competitive Advantage through After-Sales Service

Blog, International Trade

by Selma Canas, CGBP | November 22, 2022 Customer satisfaction should be the ultimate measure of a company’s success as it will lead to repeat sales and referrals for more business. Customers need to know you, like you and trust you before they will do business with you. Marketers say it costs five times as […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/After-Sales-Service.jpg 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:33:382023-02-03 12:33:38Gain Competitive Advantage through After-Sales Service

Determining the Landed Cost when Exporting

Blog, International Trade

by Selma Canas, CGBP | November 21, 2022 To be competitive in a foreign market, sellers need a good pricing strategy. In order to determine a competitive price, all costs associated with the product and delivery to buyer need to be calculated. This is the landed cost of an export shipment and is critical when […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/Determining-Landed-Cost-Exporting.jpg 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:29:492023-02-03 12:29:49Determining the Landed Cost when Exporting

Avoid Trouble with Non-payment by Insuring Your Foreign Receivables

Blog, International Trade

by Selma Canas, CGBP | November 13, 2022 Exporters often require pre-payment of goods as a way to mitigate the risk of non-payment by the buyer. Pre-payment certainly does ensure the exporter against revenue loss if the buyer is willing to do so. The buyer would have to agree to pay-up-front and wait for the […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/Insuring-Your-Foreign-Receivables-.jpg 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:26:082023-02-03 12:26:08Avoid Trouble with Non-payment by Insuring Your Foreign Receivables

Finding and Qualifying Expansion Partners Overseas Key for Exporters

Blog, International Trade

by Selma Canas, CGBP | November 13, 2022 Working with the right partners is critical to the success of a company’s international expansion plan. Exporters need the local expertise of a good partner in order to succeed in a foreign market. Not only do they have the knowledge of doing business in the country, they […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/Partners-Overseas.png 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:22:092023-02-03 12:22:09Finding and Qualifying Expansion Partners Overseas Key for Exporters

Customs Brokers vs. Freight Forwarders

Blog, International Trade

by Selma Canas, CGBP | November 14, 2022 Some may think customs brokers and freight forwarders are one in the same, while others may not know they even exist. In fact, they play very different roles in the international trade arena and may be the most trusted partner for the importer and/or exporter. Regardless if […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/Custom-Brokers-vs-Freight-Forwarders.png 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:17:052023-02-03 12:17:05Customs Brokers vs. Freight Forwarders

Franchising Series: How to Evaluate and Buy a Franchise

Blog, Starting a Business

Franchising Series:  How to Evaluate and Buy a Franchise  By Brad Mix | November 1, 2022  In part one and two of this series, we outlined the advantages and disadvantages of becoming a franchise owner, versus starting your own business from scratch. If you’re still interested after weighing the pros and cons, you’ll need to […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/Franchising-Buying-Advantages-and-Disadvantages.jpg 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:01:282023-02-03 12:06:02Franchising Series: How to Evaluate and Buy a Franchise

Franchising Series: The Disadvantages of Being a Franchise Owner

Blog, Starting a Business

by Brad Mix | November 1, 2022  In part one of this series, we itemized the advantages of owning a franchise versus starting your own business from scratch. But there’s also a flipside. Below, we’ll outline the disadvantages of franchising, for the franchisee. Disadvantages of Franchising for the Franchisee Higher Start-up Costs: One of the […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/Franchising-Buying-Advantages-and-Disadvantages.jpg 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:01:172023-02-03 12:05:54Franchising Series: The Disadvantages of Being a Franchise Owner

Franchising Series: Advantages of Owning a Franchise

Blog, Starting a Business

by Brad Mix | November 1, 2022 When determining what type of small business to start, franchising can be a very appealing market entry strategy. In part one of this series, we’ll discuss the advantages of Becoming a franchise owner over starting your own business from scratch. Advantages of Franchises Proven Business Model: When you […]

Read more
https://sbdctampabay.com/wp-content/uploads/2023/02/Franchising-Buying-Advantages-and-Disadvantages.jpg 750 1420 sbdclarry /wp-content/uploads/2021/10/Locked-Host-Logos-Horizontal-USF-Small-e1635274663378.png sbdclarry2023-02-03 12:01:082023-02-03 12:05:45Franchising Series: Advantages of Owning a Franchise
Page 1 of 45123›»

Categories

  • Business Essentials
  • Business Plans
  • Buying a Business
  • Certifications
  • COVID-19
  • Crowdfunding
  • Disaster Preparedness
  • Economic Development
  • Finance
  • Government Contracting
  • Growing Your Business
  • Healthcare
  • Human Resources
  • International Trade
  • Marketing
  • Press Releases
  • Radio and Podcast
  • Starting a Business
  • Success Stories
  • Success Stories Videos
  • Tech Commercialization/Tech Transfer
  • Veteran
  • Web and Social Media

Email Newsletters

Sign Up Now

Contact Us

Regional Office Contact Info

USF CONNECT
3802 Spectrum Blvd., Suite 201
Tampa, FL 33612

813-396-2700

Subscribe to Our Newsletter

Florida SBDC Network

The Florida SBDC at the University of South Florida is a member of the Florida SBDC Network, a statewide partnership program nationally accredited by the Association of America’s SBDCs and funded in part by the U.S. Small Business Administration, Defense Logistics Agency, State of Florida, and other private and public partners, with the University of West Florida serving as the network’s lead host institution. Florida SBDC services are extended to the public on a nondiscriminatory basis. Language assistance services are available for limited English proficient individuals.

Logos

Business Assistance

USFMuma

State Designated as Florida’s Principal Provider of Business Assistance [§ 288.01, Fla. Stat.]

© Florida SBDC at USF | contact webmaster
Scroll to top