The following list includes some common items which, more or less, are incurred by most typical businesses in their usual course. For the sake of convenience, this list has been bifurcated into Fully Deductible Expenses and Partially Deductible Expenses.
Fully Deductible Business Expenses
The complete amounts of these expense items are deductible while filing tax returns:-
•Legal fees
•Printing, copying and office stationery
•Professional and consultation fees
•Promotions
•Postage and courier
•Magazine, circular and professional journals subscription fees
•Dues and accounts payable
•Expenses incurred in lieu of continuing professional education and organizational training and development programs
•Transport and delivery charges
•Business related travel expenses
•Bank charges
•Repairs and maintenance
•Accounting fees and accounts maintenance expenses (stationery, software, etc.)
•Office/ business/ operational/ administrative utilities such as electricity, sanitation, security, etc.
•Salaries, wages and various other financial compensations to employees
•Telephone connections
•Internet service, domain name, website maintenance, hosting, etc.
•Commissions and expenses incurred for marketing and selling the products or services
•Various rentals for equipments, land, buildings, premises, etc.
•Expenses/ compensation given to contact labor/ personnel
•Manufacturing overheads
•Interest and insurance expenses
•Trade discounts
•Credits extended and expenses incurred on collection
•Purchase and renewal of licenses
Partially Deductible Business Expenses
These expenses are those which are deductible from tax returns up to a certain pecuniary limit.
•Meals, snacks and entertainment ( to be proportionally divided between personal use and business use)
•Home office expenses ( to be proportionally divided between personal use and business use)
•Gifts (up to the value of $25 per individual)
•Automobile expenses (to be proportionally divided between personal use and business use)
The above two lists of common tax deductions for a business more or less includes most deductible items, both complete and partial, that are common to almost all kinds of businesses. Apart from these above mentioned expenses, there are certain other costs or charges that can be incurred by a business to further its cause or purpose. Most of these expenses are either illegal, personal in nature or are incurred as a result of commission of any misdemeanor, penalty or any other legal infringement. Such expenses include donations to political parties, payment of bribe, penalties and lobbying expenses. Subscriptions and fees paid for memberships in social clubs are also included under non deductible expenses.
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