Business Write-Offs

by Nancy Shea
(Petaluma, CA)

I have a few questions regarding write offs. I have been working as an independent sales rep for about 4 months. It requires driving to a meeting with potential customers. I have not made one sale yet but have invested time and money (in the way of gas, mileage, and meals.)

I also need to get a blackberry so I can organize my appointments and e-mail. Can I write off my phone bill? What can I writeoff? What proof should I keep record of?

Thank you.

Congratulations on starting your own business! You can write off all kinds of business expenses depending upon the type of business you have, but first make sure to keep a good log of your mileage in an Auto Record Book and write down the names of the people you are meeting with for meals on the back of your receipts.

You can write off your BlackBerry phone and phone bill as long as you are using it for your business. If you are using it for personal use also, your time will need to be allocated between business and personal use in order to be able to determine the amount you can deduct.

For all of the other deductions, I have included Tax Deduction Lists for many different types of businesses on my website. Just click on the link above to see the complete list of business types or click here for the Direct Sellers Deductions list.

You will also want to utilize the Vehicle, Travel & Entertainment Expenses form for more information on the types of documentation that will be needed for your auto expenses.

Best wishes to you in your new business venture.

Can I Write Off The Cost of Ice Skating?

by Lou
(California)

My daughter is only 10, but has been training and competitively ice skating for many years. The last few years, the cost of coaches, equipment, ice time, etc. has reached in the range of $10,000 to $12,000 a year. I thought this was always a non-deductible expense. However, when speaking to some of the other parents who were advised by their tax professionals, they write it off as a business expense. They said something to the fact that they are investing in the career of a future paid athlete(hopefully). Does this sound legit? Do they do a schedule C and show no income but all the costs as a loss? Would this trigger an audit?
Thank you,
Lou

Custody and Access Legal Fee Write Offs

Hello,

I heard that if you are in the middle of divorce and custody and access of the child has been an ongoing issue please tell me if any or all of these fees from my lawyer are tax write off? I was told that any legal fees that had to do with custody and access could be used as a tax break can you confirm this?

Thanks

Donna L

Hello Donna,

Thank you for your question.

What you heard is basically correct. The IRS Publication states that you can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the collection or refund of any tax.

You can also deduct legal expenses that are related to either doing or keeping your job, for tax advice related to a divorce, if the bill specifies how much is for tax advice, or to collect taxable alimony.