What’s deductible? What’s not? As is so often true in life, the answer is complicated. As a top-rated CPA firm for small businesses in San Francisco, we get many, many questions from our clients and others about what’s deductible and what’s not, especially for small San Francisco businesses.
Here are some quick thoughts on San Francisco business tax deductions.
First, insurance on your home. Generally insurance on a home is not deductible, but insurance paid for by a business is. However, PMI (private mortgage insurance) can be deductible in some circumstances, and if you have a home-based business, then it can get really complicated. Reach out to us about your individual situation and we can advise what is tax deductible and what is not, in terms of insurance.
Second, land-line phones. This gets really complicated these days. Many people no longer even have a land line, but technically speaking the first land line is NOT deductible, but others are. How do you deal with Cell phones? That really depends on the usage. Let us know your cell phone usage patterns, and we can advise what can (and cannot) be legally deductible.
Third, commuting expenses are generally not deductible. That trip from your home to work: not deductible. But the 2nd trip, may be. It really depends. Many small business owners have regular routes where they “check in” with business locations and/or customers. Setting up that route in the most tax advantageous way can be a real art. If you are a small business owner and use your vehicle for business, let us help you understand what can, and cannot, be deducted and how to structure the business use of your vehicle to get the most benefits.
Fourth, business-related expenses. Dry cleaning your business clothes: generally NOT deductible. But dry cleaning a required uniform: can be deductible. Many business-type expenses can be deducted if they are structured in the right way, and/or if you keep the right sorts of records to segregate expenses that are truly business from those that are personal.
In sum, those are some tips and thoughts on deductions. Make sure to speak with a tax professional, and get advice on your personal situation. We work with many San Francisco businesses and can certainly advise on tax issues.