Savvy business owners are always looking for ways to reduce their tax bill. The good news is that there are many tax deductions you can take advantage of. Buying from an existing business is quite common, and it`s normal for new business owners to deduct some of the associated costs. However, since your new business is an asset, claim certain expenses as depreciation rather than start-up deductions. If you are an individual and your attempt to enter the business is not successful, the expenses you had to incur in the business fall into two categories. Your employees must provide you with their travel and maintenance expenses appropriately. They must provide you with documentary evidence of their travel, mileage and other employee business expenses. This proof must include items such as receipts, as well as an expense report, ledger, daily planner, or similar record in which the employee entered each expense at or near the time the expense occurred. As a business expense, you can deduct a flat-rate business tax levied by a place for the privilege of working in the locality or operating a business. In general, you can amortize the capitalized costs of «section 197 intangible assets» (see section 197 «Intangible assets,» later) ratified over a 15-year period.

You must amortize these costs if you hold the intangible assets under section 197 related to your business or business activity or in an income-generating activity. Below are other taxes that you can deduct if you incur them in the normal course of your business or business activities. Yes, you can write off tax preparation fees for your business. Remember that you need to separate your business performance from your personal performance. As with many deductions, you can write off royalties and expenses if they are considered business expenses. For example, a lawyer must pay an annual fee to remain licensed in the state. These costs can be amortized. If you liquidate your business and some of the receivables you hold become worthless, they will be treated as bad trade receivables.

If you have more than one business location, determine your primary place of business based on the following factors. You may apply the provisions of Articles 1.195-1, 1.248-1 and 1.709-1 to all after 22. October 2004, provided that the limitation period for the assessment for the year of the election has not expired. Otherwise, for business start-up and organization costs paid or incurred after October 22, 2004 and before September 9, 2008, the provisions of articles 1.195-1 b), 1.248-1 (c) and 1.709-1 (c) in force before September 9, 2008 apply. In general, the cost of transporting machinery from one city to another is a deductible expense. This also applies to the cost of transporting machines from one factory to another or from one part of your factory to another. You can deduct the cost of installing the machines on the new location. However, you need to capitalize on the cost of installing or moving the newly acquired machines. It is due until the due date of the shareholders` declaration (without extension) for the first fiscal year in which the company carries out its activities.

However, if the partnership applies the cash basis of accounting and pays the costs after the end of its first tax year, see Cash Method Partnership under How to amortize, later. The cost of operating a car, truck or other vehicle in your business may be deductible. For more information on how to determine your deduction, see Ad 463. Trade receivables or debentures measured at fair value (FMV) at the time of receipt are only deductible at that value, although the FMV may be less than par. If you purchased a debt for less than its face value and the claim subsequently becomes worthless, you cannot deduct more than the amount you paid for the purchase. Workers` compensation insurance under state law, which covers all claims for bodily injury or occupational disease suffered by employees of your company, regardless of their fault. You rent space in a facility to run your tool manufacturing business. If you are subject to the uniform capitalization rules, you must include the rent you paid for the occupation of the facility in the cost of the tools you manufacture. A «reimbursement or indemnity plan» provides for the payment of advances, reimbursements and allowances for non-entertainment travel and catering expenses incurred by your employees in the ordinary course of business. If the expenses are justified, you can deduct the eligible amount on your tax return.

Due to differences in accounting policies and tax legislation, the amount you can deduct for tax purposes may not be the same as the amount you deduct in your books and records. For example, you can deduct 100% of the cost of meals in your company`s books and records.