8 Commonly Missed Business Tax Deductions

deducting business expenses
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Commonly Missed Business Deductions

Many business people pay more tax than needed because they miss deductions they might have taken. Here are some common business deductions for which you might be eligible. These deductions are presented as possibilities which you might want to explore. You may not be eligible for all of these deductions or a deduction may have restrictions on it. If you think you may be eligible for one or more of these deductions, check with your tax advisor for more information.

Petty cash expenses. 

Petty cash is the small items you pay cash for, like bagels for the office meeting or parking and tolls. Capturing these small expenses can add up to big tax savings.

Car expenses.

You can legitimately deduct expenses for the use of your car for business. But you must keep a contemporaneous (at-the-time) log and include information about the business purpose.

Expenses for preparing documents,

Document preparation costs for a business plan or a loan application. If your business needs a loan and you use the services of an attorney or accountant to prepare a business plan or financial data, you can deduct these expenses, even if you don't get the loan.

Carrying Charges and other Fees

Carrying charges are fees and interest on property. Some carrying charges may be deductible if they are not capitalized (counted as long-term expenditures). Don't forget bank fees, including NSF costs.

Yes, these are legitimate business expenses. 

Research and Experimental Costs 

Costs of research and experimentation may be deductible if you choose not to list them as capital (long-term) expenses. There are many restrictions and qualifications relating to this deduction.

Business Startup and Organization Costs

You may be eligible to deduct some of your business startup costs up to $5,000 and organizational costs up to $5,000 (for expenses after October 22, 2004).

If your startup or organizational costs exceeded $50,000, your deduction may be limited.

Disability Access Costs 

If you make improvements or remodel your business facility to accommodate customers and employees, you may be eligible for a deduction for these expenses. The annual limit for these deductions is $15,000.

Note that this list is provided as a reminder of possible deductions. For more details on these deductions, see IRS Publication 535.

Finally, and most important: 

Miscellaneous Business Expenses

This is a strange category, but it's important to note. These expenses are the ones you pay out of your own pocket and forget to get reimbursed for by the business. They can be meals with customers or clients. or a visit to the donut shop for treats for a meeting, or just driving expenses you forget to note. They are expenses on one side of the accounting equation and owner capital contributions on the other. Add them all up and they result in meaningful deductions you should be taking.