IRS Sees Millions of Tax Returns Last Days of Tax Filing Season

WASHINGTON — The Internal Revenue Service today announced that the agency has received 135.6 million returns this year following a late surge of filings last week.

During the week ending April 21, the IRS received more than 17 million tax returns. The vast majority, 13.6 million returns, were filed through IRS e-file.

Looking at the entire tax filing season, the IRS has received 135.6 million tax returns through April 21. With the influx of returns last week, the number of filings is now close to the number of returns from last year’s filing season.

With the mid-April filings, the number of refunds issued this year swelled to 97 million worth $268.3 billion. The average refund was $2,763, up slightly from last year’s average of $2,711.

Taxpayers have filed 11.6 million extension forms this filing season, up 0.9 percent compared to the same time last year. The vast majority of extensions were e-filed, 9.7 million, an increase of

11 percent from the same time last year.


                   2017 FILING SEASON STATISTICS

Cumulative statistics comparing 04/22/2016 and 04/21/2017
Individual Income Tax Returns: 2016 2017 % Change
Total Returns Received 136,528,000 135,638,000 -0.7
Total Returns Processed 129,456,000 128,789,000 -0.5
E-filing Receipts:
TOTAL 122,546,000 122,164,000 -0.3
Tax Professionals 70,864,000 70,401,000 -0.7
Self-prepared 51,682,000 51,763,000 0.2
Web Usage:
Visits to 325,525,568 312,255,666 -4.1
Total Refunds:
Number 97,079,000 97,104,000 0.0
Amount $263.197 Billion $268.296 Billion 1.9
Average refund $2,711 $2,763 1.9
Direct Deposit Refunds:
Number 81,221,000 81,646,000 0.5
Amount $234.269 Billion $239.410 Billion 2.2
Average refund $2,884 $2,932 1.7


15 Expenses Many Taxpayers Think They Can – But Actually Can’t – Claim As Tax Deductions

  1. Can I deduct the cost of styling photos for my Instagram account?
  2. Can I deduct moving expenses for my dog?
  3. Can I deduct the cost of covering up a tattoo to keep my job?

I get lots of questions like the ones above from taxpayers throughout the year. My answer is usually, “It depends.” That’s because facts and circumstances matter: tax deductibility may hinge on such specifics as what you do for a living, where you live, and whether you have a diagnosed medical condition.

For the record, my answers to these specific questions:

  1. I don’t know, are you Beyoncé?
  2. Your dog is considered property so you can deduct those costs so long as you otherwise meet the criteria for moving expenses.
  3. No, it’s considered a personal expense, but do it anyway if you need to keep your job. Or switch jobs.

Most of the time, the rules are straightforward. Occasionally, you’ll hear about a tax deduction that some other person could wrangle, but that’s typically because of very specific facts and circumstances. Follows is a list 15 expenses that many taxpayers think they can – but can’t – claim as tax deductions on an individual federal income tax return (but a few still can):

  1. Pets.No matter how much your four-legged, scaly or feathered friend feels like a member of your family, the cost of caring for your pet – from food to vet visits – is generally not deductible. The Internal Revenue Service (IRS) considers pet-related expenses routinely personal. A few exceptions apply, including the care of service animals and guard dogsand potentially, charitable expenses for animal rescues.
  2. Alarm systems.There is no tax deduction for the installation and maintenance of an alarm system at your hometo protect your personal belongings even if you have really, really nice stuff. There’s an exception, however, if you’re protecting your business property: the installation and the monthly fees at your place of business are deductible. If your place of business happens to be your home, you can deduct a portion of the alarm system if you claim the home office deduction.
  3. Gym memberships and weight loss programs.Gym memberships and weight loss programs are only deductible as a treatment for a diagnosed disease or condition. The program must be specifically ordered by your doctor: if your doctor merely advises you to lose some weight or up your activity level to protect your health, that’s not sufficient. Remember that you still have to meet the applicable thresholds to claim the deduction which means that you must itemize on a Schedule A and your deductible medical expenses are only those that exceed 10% of your adjusted gross income (AGI).
  4. Plastic surgery.You cannot deduct the cost of plastic surgery to simply look or feel better; as with gym memberships and weight loss, to be deductible, the procedure must be a treatment for a specific disease or condition diagnosed by your doctor. Plastic surgery for a non-medical purpose is never a tax-deductible expense.
  5. Vitamins and health shakes.Assuming that you itemize, you can deduct qualifying medical expenses. That includes prescription drugs but over the counter meds – even if you need them – don’t count unless prescribed by a doctor (a mention or suggestion isn’t sufficient). Even when prescribed by a doctor, certain foods, and food supplements – like health shakes – may still be non-deductible if they are merely taking the place of other foods. However, there are some exceptions, like those for food allergies or celiac disease.
  6. Maternity clothes.Clothing for work is only deductible if the sole purpose is clearly for business purposes (think branded uniforms). It’s not deductible if you could wear the clothes outside of your workplace even if you don’t. That goes for maternity clothes, too. If you have to stock up on maternity clothes – including suits for court or coats for outdoor use – to get you through your pregnancy, that cost is not deductible even if you don’t plan to wear them again. Ever.
  7. Driver’s license fees.While state and local taxes are deductible for taxpayers who itemize, associated costs and fees may not be. That includes your driver’s license and car inspection fees. Similarly, you can’t deduct the cost of licensing dogs, cats or other animals – even if they’re considered property in the state where you live.
  8. Political contributions.You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Likewise, you can’t deduct lobbying expenses, including amounts paid for research, preparation, planning, or coordination of those expenses. You can’t get around the rules by claiming the expenses are for business purposes: they’re still not tax deductible.
  9. Commuting expenses.You cannot deduct the costs of getting to and from work, no matter if you take a bus, trolley, subway, taxi, or drive your own car. Commuting expensesto and from your regular place of work are never deductible; however, the cost of other business or job-related travel may be.
  10. Private school.Private school expenses (including tuition) are not deductible. However, expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten may be deductibleif they otherwise qualify as child care.
  11. Homeschooling expenses.Teachers may deduct up to $250 for books, supplies, computer equipment, and supplementary materials used in the classroom and paid for out of pocket. This rule doesn’t apply to those who homeschool: in Pub 17, the IRS specifically excludes expenses for home schooling for purposes of the deduction. No other federal tax deductions apply: however, a handful of states, including Louisiana, allow state tax breaks to cover the cost of homeschooling expenses.
  12. Babysitting.Occasional babysitting so that you can catch a movie that isn’t animated (!) or enjoy a nice meal may be desperately needed, but is still considered personal in nature and not tax deductible. However, if you pay for child care so that you can work or look for work, those expenses may count towards the child and dependent care credit.
  13. Expenses paid by someone else.In most cases, the IRS only allows deductions for amounts that you pay out of pocket for your own expenses (or those belonging to your spouse and your dependent). If someone else makes your home mortgage payment or pays off your medical bills, typically neither of you can claim a deduction. However, for purposes of the student loan interest deduction, if another person makes a student loan payment on your behalf, it’s as though you made the payment. Some limitations apply.
  1. Clown noses and sparkly leotards.Typically, you can’t claim a tax deduction for expenses for clothing, make-up, or hair care expenses for your job if you could wear them outside of work – even if you wouldn’t (see #6). However, professional artists and performers may be able to deduct certain expenses – like the costs of clown noses and sparkly leotards – as an above-the-line deduction if those items are used exclusively for performances. (If you want to wear your clown nose and/or sparkly leotard outside of your performances, I won’t judge you, but you’ll lose your opportunity for a tax deduction.)
  2. Child support.Okay, this one is a little bit of a cheat. While most of the deductions on the list could, under some circumstances, be shoe-horned into a deductible position, child support is never deductible: it is tax neutral. It is not tax deductible to the payor nor taxable to the recipient. However, spousal support is both tax deductible to the payor and taxable to the recipient. For more on both, check out this prior article.

Some taxpayers can claim certain of these deductions under specific circumstances (home offices, diagnosed medical conditions, special occupations) but these deductions are off-limits for most taxpayers. If you think they might apply to you – or if you’re not sure – it’s always best to consult with your tax professional.


Your 2017 Tax Form Cheat Sheet


Posted: 02 Feb 2017 05:40 AM PST

Tax season successfully opened on January 23, 2017. If you’re one of the estimated 157 million taxpayers who will file an individual income tax return this year, here’s your quick cheat sheet for figuring out which tax form to file. For a deeper dive into the requirements for each form, check out this post.

(Remember, depending on your circumstances, you may not need to file at all in 2017 – here’s what you need to know about who must file a tax return.)

If your only income in 2016 was from Social Security OR if your gross income is less than $10,350 if filing single ($20,700 if married filing jointly) then you may not need to file a federal income tax return in 2017. You may still need to file if you are self-employed or if you received a premium tax credit payment.

If your filing status is single or married filing jointly with no dependents AND you only received wages, salaries, W-2 tips, taxable scholarship/fellowship grants, unemployment compensation AND taxable interest of less than $1,500, then you may be able to file form 1040EZ. Income limits and exceptions apply.

If the only tax credits you intend to claim are the nontaxable combat pay election tax or the EITC, Earned Income Tax Credit (your income from working for someone or from running your own business must be less than the income limits), then you may be able to file a form 1040EZ. Income limits and other rules apply.

If your taxable income for 2016 is less than $100,000 and does not include tips not reported on a form W-2, then you may be able to file form 1040EZ or form 1040-A. Additional rules and exceptions apply.

If you intend to claim one of the following “above the line” adjustments: the IRA deduction, the student loan interest deduction, the educator expenses deduction, or the tuition and fees deduction, then you can file a form 1040A or a form 1040 so long as you meet the other criteria. You may not file a form 1040EZ.

If you must make an individual shared responsibility payment because you or a member of your family did not have health care coverage or qualify for an exemption in 2016 then you can file form 1040EZ, form 1040A, or a form 1040. You cannot use form 1040EZ to report advance payments or to claim the premium tax credit.

If you owe household employment taxes because you have household employees (anyone who performs household work and can be classed as an employee because you exercise control over their duties) including housekeepers, babysitters, cleaners, gardeners, nannies, and drivers, then you must file a form 1040.

If you or your spouse are blind (meaning you can’t see better than 20/200 with glasses or contact lenses, or your field of vision is 20 degrees or less) or you are over age 65 and intend to claim one or more additional standard deductions (more on higher standard deductions here), then you must file a form 1040.

If you have self-employment income and will file a Schedule C, Profit or Loss From Business OR if you have income from rents or royalties and will file a Schedule E, Supplemental Income and Loss OR if you will report realized gains or losses on Schedule D, Capital Gains and Losses, then you must file a form 1040.

If you intend to itemize your deductions (including medical expenses, real estate taxes, home mortgage interest, charitable donations, casualty and theft losses, un-reimbursed job expenses, and tax preparation expenses) then you must file a form 1040. Most taxpayers will claim the standard deduction.

If you know that you have to file a federal income tax return for 2016 but aren’t sure which form then you should file a form 1040. There’s no downside to filling out a form 1040 – other than complexity – since you can use it to claim all of your deductions and credits.

IRS Addresses Top Tax Refund Myths As Tax Season Rolls On


Posted: 01 Feb 2017 11:27 AM PST

It’s tax season! Tax season opened on January 23, 2017, and according to the Internal Revenue Service (IRS), so far, so good.

Unfortunately, some taxpayers were caught off guard by a new rule that requires the IRS to hold tax refunds for taxpayers who claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit. You can find out more about those credits and the delay here.

As taxpayers eagerly await their tax refunds, the IRS has acknowledged that there are a number of “misunderstandings and speculation about refunds.” To help sort out the truth from the confusion, the IRS has issued a list of refund-related myths:

Myth 1: All Refunds Are Delayed

Taxpayers who are affected by the new law those claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). Those taxpayers should expect the IRS to hold their entire refund check since the IRS isn’t allowed to release the part of the refund that is not associated with the EITC and ACTC. Taxpayers who do not claim the EITC or the ACTC are not affected by the new law. However, while more than 90% of federal tax refunds are issued in less than 21 days, some tax returns may require additional review and may take longer.

 2: Calling the IRS or My Tax Professional Will Provide a Better Refund Date

According to IRS, many people mistakenly think that talking to the IRS or calling their tax professional is the best way to find out when they will get their refund. However, the best way to check the status of a refund is online through the “Where’s My Refund?” tool at or via the IRS2Go mobile app. The IRS updates the status of refunds once a day, usually overnight, so checking more than once a day will not produce new information. For an explanation of refund status announcements, check out this prior post.

Myth 3: Ordering a Tax Transcript a “Secret Way” to Get a Refund Date

Ordering a tax transcript will not help you find out exactly when you might get your refund. The information on a transcript does not necessarily reflect the amount or timing of a refund. While you can use a tax transcript to validate past income and tax filing status for mortgage, student, and small business loan applications and to help with tax preparation, you should use “Where’s My Refund?” to check the status of their refund. The codes that you’ll see on your tax transcripts do not offer additional information about when your refund will be issued.

Myth 4: “Where’s My Refund” Must be Wrong Because There’s No Deposit Date Yet

The “Where’s My Refund?” tool will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after February 15. Those taxpayers claiming EITC or ACTC will not see a refund date until then. The IRS, tax preparers and tax software will not have any additional information on refund dates.

Myth 5: Delayed Refunds, those Claiming EITC and/or ACTC, will be Delivered on February 15

Remember that the new law will not allow the IRS to release tax refunds until after February 15. That does not mean that refunds will be available on that date. In addition to normal processing times for banks, remember that President’s Day weekend may impact when you get your refund. The IRS cautions that delayed refunds may not start arriving in bank accounts or on debit cards until the week of February 27, assuming that there are no processing issues with your tax return and you choose direct deposit.

That’s it. There are no magic codes, keys or other tricks to getting your tax refund faster this tax season. The IRS encourages taxpayers who are expecting tax refunds to file as early as possible, using e-file and direct deposit.

If You Owe Taxes To IRS, You Could Lose Your Passport And Your Ability To Fly


Posted: 26 Jan 2017 06:51 PM PST

If you’re like me, your calendar is already filling up – and it’s just January. If those plans include travel, you need to be aware of a new law which could affect your future plans.

On December 4, 2015, the Fixing America’s Surface Transportation Act, or “FAST Act,”  became law. The purpose of the law was to provide long-term funding for transportation projects, including new highways. However, the Act also included a significant new provision which allows the Department of State (sometimes just called “State Department”) to yank passports from delinquent taxpayers.

Here’s how it works. The Internal Revenue Service (IRS) doesn’t have control over passports: that’s the purview of the State Department. Tax debts are assessed by the IRS: the State Department doesn’t generally have access to taxpayer information because of privacy laws.

To bridge the two, the law now requires the IRS to advise the State Department about seriously delinquent taxpayers. The State Department may then refuse to issue or renew a passport for a seriously delinquent taxpayer; the Secretary of State is also permitted to revoke any passport previously issued to a seriously delinquent taxpayer.

For purposes of the new law, a “seriously delinquent” tax debt is defined as “an unpaid, legally enforceable federal tax liability” greater than $50,000, including interest and penalties. The $50,000 limit will be adjusted each year for inflation and cost of living. The limit is not per year but cumulative meaning that it’s the total tax debt that matters.

There are some exceptions under the law. Tax debt which is being paid on time as part of an installment agreement or under an Offer In Compromise doesn’t count. It also doesn’t include any tax debt for which a Collection Due Process hearing is timely requested in connection with a levy or a debt where the collection has been suspended due to an innocent spouse claim.

If you’re seriously delinquent under the new law, the IRS is required to notify you in writing at the time that it certifies the debt to the State Department. The State Department will then hold your passport application or renewal for 90 days to allow you to resolve any errors, make full payment, or enter into a satisfactory payment plan. There is no grace period for resolving your debt before the State Department revokes an existing passport.

To get off the list, you must prove that the debt is fully satisfied, is legally unenforceable or is not seriously delinquent tax debt under the statute (in case you’re wondering, that does not include debt that dips below $50,000 – once you’ve hit that threshold, you must either pay it down or meet one of the other criteria).

That feels like the end of the story. You might be thinking if you have some tax debt, maybe you’ll just decide not to vacation in Belize for a bit.

But what if just you want to go to Nashville? Or Boston? That’s where things get tricky. Under another law – this one from 2005, the REAL ID Act – federal agencies cannot accept driver’s licenses and identification cards issued by states that do not meet certain standards.

As of January 22, 2018, all travelers with a driver’s license or identification card issued by a state that does not meet those standards must present an alternative form of identification acceptable to the Transportation Security Administration (TSA) unless that state has an extension. The list of acceptable identification includes a passport.

You can check the status of your state for REAL ID Act purposes using our handy map:


Wooo HOOOO….Pennsylvania is NON compliant!!!

Those rebels….

Safeguarding Taxpayer Data: Create Strong Passwords

U.S. Department of Homeland Security Seal

Passwords are often the key to the identification and authentication process for access to your computer, email and encrypted information, both received and transmitted. For this reason, it is critical to your business and the security of your client data that you have strong passwords and that you protect those passwords.

Here are some things you should consider in creating and protecting passwords:

  • Longer passwords are safe and more difficult to guess. A strong password should be a minimum of eight characters. It should include a combination of letters, numbers and symbols or special characters. Your password should include at least one uppercase letter, one lowercase letter, one number and one symbol or character.
  • Personal information should not be included in your passwords.  Names of siblings, children, pets, etc., are generally available on social media, which makes it easier for cybercriminals to figure out your password.
  • Avoid using the same password for all of your information systems, accounts or devices. If someone does guess one password, they will not have access to all your systems, devices or data.
  • Substitute numbers and symbols for letters in words or phrases to make it more difficult to guess a password.
  • Do not share your password and be careful of attempts to trick you into revealing your password.


Toolkit Materials by Cyber Topic

Attachment Size


Attachment Size
 Social Media Guide 180.59 KB
 Internet of Things Tip Card 146.25 KB
 Cybersecurity While Traveling Tip Card 149.32 KB
 Chatting with Kids about Being Online Booklet 4.89 MB
 Parents and Educators Tip Card 154.11 KB
 Mobile Security Tip Card 156.06 KB
 Seguridad Cibernética Para Los Niños 281.79 KB
 Best Practices for Creating a Password 262.54 KB
 Best Practices for Using Public WiFi 215.71 KB
 Identity Theft and Internet Scams 359.92 KB
 Mobile Banking and Payments 227.88 KB
 Online Gaming 301.16 KB
 Online Privacy 226.48 KB
 Reporting a Cybercrime Complaint 187.17 KB
 Insider Threat 447.96 KB
 Malware 354.77 KB
 Five Every Day Steps Towards Online Safety 235.9 KB
 Five Ways to be Cyber Secure at Work 232.38 KB
 How to Recognize and Prevent Cybercrime 245.29 KB
 Five Steps to Protecting Your Digital Home 202.05 KB
 Your Part in Protecting Critical Infrastructure 243.66 KB
 Phishing 253.68 KB

IRS Says 2017 Tax Filing Season Opened Successfully & On Schedule


It’s the first day of the 2017 tax season. The Internal Revenue Service (IRS) is now accepting and processing 2016 federal individual income tax returns.”]The Internal Revenue Service (IRS) is now accepting and processing 2016 federal individual income tax returns – and so far, according to IRS, they’re on schedule.

“Following months of hard work, we successfully opened our processing systems today to start this year’s tax season,” said IRS Commissioner John Koskinen. “Getting to this point is a year-round effort for the IRS and the nation’s tax community. The dedicated employees of the IRS look forward to serving taxpayers this filing season, and I want to thank all of the tax and payroll community for their hard work that makes tax time smoother for the nation.”

That doesn’t mean that refunds are necessarily in the mail. Some tax refunds will be delayed.”

Last year, Congress passed a law which requires the IRS to hold refunds tied to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15. The hold allows IRS to match information from forms W-2 and 1099 with information reported on tax returns; in prior years, refunds could be issued before forms were matched which increased the likelihood of fraud. The hold, together with bank processing times and bank holidays, means that taxpayers should not count on seeing those tax refunds until the week of February 27.

The IRS expects more than 70% of taxpayers to receive tax refunds this year. Last year, 111 million refunds were issued, with an average refund of $2,860. The IRS believes the numbers for 2017 will be similar.

Like last year, the IRS anticipates issuing more than nine out of 10 refunds in less than 21 days. However, with additional levels of review aimed at reducing tax-related identity theft and refund fraud, there could be individual delays.

What about state income tax returns? Remember that those timelines may differ from the IRS timeline and there may be additional requirements or reviews this year to try and reduce instances of fraud.

Some of these changes will be invisible (or nearly invisible) to taxpayers but will help the IRS, states and the tax industry provide new protections for taxpayers.

One change is a new 16-digit verification code which will appear on approximately 50 million forms W-2, up from two million forms in 2016. If your form W-2 contains the code, you (or your tax professional) should enter the code when prompted using software (electronically filed returns only). If the code is not included, don’t worry: your tax return will still be accepted. Eventually, however, the plan is to increase the numbers of forms W-2 with the code over time: the code helps the IRS to verify that the form W-2 is authentic and is intended to slow down the instances of fraud.

In addition, many Individual Taxpayer Identification Numbers (ITINs) expired on January 1, 2017. Under a new law, an ITIN that has not been used on a federal tax return at least once in the last three years is no longer if it has not been renewed by the taxpayer. Any ITIN with middle digits of either 78 or 79 (for example, 9NN-78-NNNN or 9NN-79-NNNN) will also expire on that date. Since it can take up to 11 weeks to process a complete an ITIN renewal application, if you need an ITIN, you should submit a completed form W-7, Application for IRS Individual Taxpayer Identification Number (downloads as a pdf), and all required identification documents, soon.

Also new this year, taxpayers using a tax filing software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at the IRS website.

Taxpayers have until Tuesday, April 18, 2017, to file their 2016 returns and pay any taxes due. The due date is April 18, 2017, and not April 15, 2017. That’s because April 15, 2017, falls on a Saturday which would normally result in a move to the following Monday (April 17, 2017). However, this year, Emancipation Day falls on Monday, April 17. Since that’s a legal holiday in the District of Columbia, the tax filing deadline will be pushed ahead for all individual taxpayers to Tuesday, April 18, 2017.

The extra couple of days in April do not get tacked on to automatic tax extensions. Taxpayers requesting an automatic extension will have until Monday, October 16, 2017, to file (that’s the first business day after October 15, 2017).

More than 153 million individual federal income tax returns are expected to be filed this year.

8 Little-Known Tax Deductions You Should Prep for This New Year

By Meredith Wood, Fundera – January 11, 2017

8 Little-Known Tax Deductions You Should Prep for This New Year

Start preparing now to save money next tax season by accounting for these tax-deductible business expenses.

Many small business owners aren’t aware, but they’re often eligible for lots of different tax deductions from the government.

Sure, most entrepreneurs know to deduct expenses like employee salaries and benefits, the cost of goods sold, and rent. But there are some more unusual opportunities for small business owners, too.

It can be difficult to figure out exactly which deductions you qualify for—especially if you don’t keep meticulous records or set aside time to pore over your expenses—but any tax deduction you don’t take advantage of is just money left on the table.

So, when tax season comes knocking, refer to this list of eight little-known tax deductions you should be aware of—and save money for your small business.

1. Utilities

You might already be well aware that you can deduct your business’ rent payments from your taxes—and even if you work from home, you can calculate a percentage of your rent to deduct based off of how much space you use for your business.

But did you know you should be deducting your utilities payments, too?

From telephone calls to electricity and water bills, your small business is eligible to save money here. However, you do need to make sure that you’re only deducting business expenses and not personal ones. Keep records of business versus personal phone calls when deducting from your telephone bill, and save your utilities bills as well.

2. Insurance

Business insurance is generally not a bad idea: Nine times out of 10, you’ll be extremely glad you made those small monthly payments if something unexpected occurs.

And as an added bonus, many types of business insurance are actually tax deductible. From health insurance to workers’ compensation, make sure you put these premium payments on your tax forms next year.

3. Equipment & Machinery Payments

There are plenty of good reasons to rent your equipment and machinery instead of buying them. From upgrade flexibility to lower upfront costs, and even the possibility of financing, it can be a compelling option.

One more advantage: You can deduct your rental payments from your taxes. (Plus, you can also deduct any repairs you need to make as well.)

4. Car Expenses

When it comes to your vehicle, there are a few different tax deductions that many small business owners forget about.

You can use the standard mileage rate—57.5 cents per mile as of 2015—to deduct the amount you drive for business purposes.* Or, if you don’t take the mileage deduction, you can deduct the actual expenses related to a business use of your car, van, truck, or any sort of motor vehicle:

  • Parking fees
  • Advertising decals
  • Union member trips
  • Gas and oil
  • Tire maintenance
  • General auto repair
  • Registration fees

If you’re not the type of person who can keep up a consistent, accurate log of everywhere you drive, to the 10th of the mile, every day—not to worry. Here’s a great guide to calculating your business auto expenses for the tax deduction you deserve.

5. Office Supplies & Furniture

That’s right: You can deduct both office supplies and office furniture.

As a small business owner, you know all too well how small expenses stack up. Paperclips, thumb tacks, staples, pens and pencils, paper, notebooks, post-its, printer cartridges—all these supplies and more are tax deductible for small business owners.

And save your receipts for the slightly bigger purchases, too. Got a nice chair or couch for your home office so clients can wait in comfort? Dished out cash for additional chairs, desks and electronics for those new employees you hired? These expenses can all come out of your taxes as well.

6. “Entertainment”

Depending on the type of small business you run, this might sound like a joke—or a blessing.

If part of running your business involves taking clients out to meals, theater events, concerts or clubs, baseball games, or anything like that, then don’t simply consider that money to be an acquisition cost. It’s possible to deduct up to half of those expenses for your business.

The IRS will want to see that these expenses are clearly for business purposes that are necessary, appropriate and helpful. But if that sounds like you, then make sure to mark these outings for future savings.

7. Interest Payments

Got a mortgage, small business loan or business credit card?

That’s right—those daily, weekly or monthly interest payments are also tax deductible for small businesses. These savings can be a huge boon to entrepreneurs who are growing their businesses with debt.

And what’s better than an already-itemized list of tax deductions for you to simply add onto your tax forms or send over to your accountant?

8. Business Taxes


Many small business owners aren’t aware of this, but your business taxes are actually tax deductible on their own. From federal, state and local taxes to income, real estate (including purchases and sales), employment (including social security and Medicaid payments), self-employment and sales taxes (including resale merchandise and depreciation costs), these expenses are well worth recording for those future savings.

The Bottom Line

The more you save on taxes, the more money you get to put right back into your small business. Use these tax deductions to take advantage of the ability the government gives you to manage a growing, thriving business.

For more expert advice, visit Manta’s guide to Taxes for Small Business

Meredith Wood is the head of content and editor-in-chief at Fundera, an online marketplace for small business loans. Prior to Fundera, Meredith was the CCO at Funding Gates. Meredith manages financing columns on Inc, Entrepreneur, Huffington Post and more, and her advice can be seen on Yahoo, Daily Worth, Fox Business, American Express OPEN, Intuit, the SBA and many more.

* CORRECTION: This article was updated to clarify the following: You can take the standard IRS mileage deduction, or you can deduct the actual expenses of operating a business vehicle, but you can’t deduct both mileage and actual expenses.