Sarah_cpa

Late payment fees are deductible if they arise from business-related transactions on a credit card. For example, if a late fee occurs due to a delayed payment on business purchases, it qualifies as a business expense. To claim this deduction, it's important to maintain documentation showing the nature of the expense and its connection to business activities, such as invoices and receipts for the purchases. Personal late fees or those unrelated to business transactions are not deductible. Keeping proper records of business transactions and associated fees is essential for compliance with IRS r

Credit card fees are deductible based on the percentage of business use. For example, if the card is used 60% for business, you may deduct 60% of the fees, including annual fees, transaction charges, and interest on business-related purchases. It’s crucial to maintain detailed records that clearly segregate business and personal transactions to ensure the deduction is accurate. Using a dedicated business credit card simplifies tracking, making it easier to separate business expenses from personal ones. This approach helps ensure compliance and minimizes potential disputes during IRS audits, s

Stolen funds intended for investments may be deductible if classified as a casualty or theft loss. To qualify, the theft must meet IRS criteria and be reported to the authorities. Documentation, including police reports, proof of funds, and evidence of their intended use, is essential to support the claim. It’s important to note that personal theft losses are generally not deductible, but thefts related to investments may qualify under specific circumstances. The IRS has strict rules regarding the reporting and documentation of theft losses. Consult a CPA for guidance on handling complex loss

Tax preparation fees are deductible when related to your business. For self-employed individuals or freelancers, fees for preparing Schedule C or other business-related forms qualify for a deduction. This includes costs for services like tax filing, bookkeeping, or preparing tax documents necessary for your business. However, personal tax preparation fees are not deductible under current tax laws. To maximize deductions, it’s essential to maintain clear records that distinguish between business and personal tax preparation expenses. This will help ensure compliance with IRS regulations and pr

Loan transfers or payments for car repairs may be deductible if the vehicle is used for business purposes. The deductible amount depends on the percentage of business use. For example, if the vehicle is used 70% for business, 70% of the repair costs are deductible. To support the deduction, maintain repair invoices, mileage logs, and documentation showing the vehicle’s business-related use. These records are essential for ensuring compliance with IRS rules and substantiating the claim in case of an audit, ensuring that only the business-use portion of the expense is deducted.

Food delivery costs are deductible when they are business-related, such as meals for client meetings, business travel, or meals consumed while working. According to IRS guidelines, the 50% rule applies, meaning only half of the cost is eligible for deduction. Personal food delivery expenses, such as meals for personal use, are not deductible. It’s essential to maintain detailed records, including receipts and notes explaining the business purpose of the meal. This should include client names, meeting topics, or the nature of the business trip. Keeping accurate documentation is crucial to subs

Apartment rent is deductible if part of the space is used as a home office that meets IRS criteria. The office must be used exclusively and regularly for business. The deduction is based on the square footage of the office compared to the entire apartment. For instance, if the office occupies 10% of your apartment, you may deduct 10% of the rent. Keep detailed records, such as lease agreements and measurements, to substantiate your claim. The deduction is based on the square footage of the office compared to the entire apartment.

Rent paid for storage space used exclusively for business purposes is deductible. For instance, if you rent a unit to store inventory, tools, or other business supplies, these costs qualify. Ensure the space is used solely for business activities and keep a rental agreement or receipts as proof. Even if the storage space is within your home, such as a dedicated basement or garage, you can still claim the expense under home office deduction rules. Proper documentation is key to substantiate your claim and ensure compliance with IRS guidelines.