Business expenses

[kathy4530050]

For those of you who are small business owners, can anyone tell me what kind of standard applies to business expenses? I would imagine that they must also be "reasonable and necessary."

If I list a few--could you weigh in and tell me how these might be perceived?

-website updates and maintenance
-website optimization
-professional conferences involving out-of-state travel (I'm a presenter)

Now that I have basically cut marketing and p.r. out of my budget, my website and conference presentations are my only marketing/p.r. tools. I'll need these to bring in new business.

What do you think?

Thanks!

Kathy

[fltoo]

Kath, there is no standard for expenses since it depends on your line of work.

Anything that is business related is an expense. The ones you mentioned are all fine.

Some expenses for you might be

travelling to and from
car miles if you drive
paper, pencils, presentation materials, etc
home office, including all utilities, phones, maintenance
professional services, accountant, lawyer, etc
software and hardware
advertising, flyers
postal expenses, copying expenses
all related supplies

also, you can depreciate your car, computer and any other equipment for the biz

I use turbo tax, you can input all expenses at tax time and it will spit out a profit and loss statement for you

To keep organized, I recommend you use envelopes labeled with all the catergories. When you get a receipt, immediately put it in the envelope.
If you go to Staples, put the receipt in the envelope labeled "supplies"

Put your house utility bills in the "utilities" envelope so at tax time, you can quickly pro rate the bill.

[kathy4530050]

Good news! THANK YOU. I use QuickBooks, so my expenses go right in right away and P&L statements are fast and easy. I'm glad to know that I can continue operating my business normally and not have to worry about going over the limit of some expense category. THAT was my concern . . .

[fltoo]

Excellent. I suggested manual saving of receipts because I didn't know how computer literate you were. LOL

I transfer right from QB to Turbo.

[SuzieBK]

Depreciations

My husband found some PowerPoint online that was a presentation by the Memphis-area trustee to lawyers on the interpretation of the changes in 2005. In it, they said that while you can put depreciation on your taxes, you can't claim it as an actual expense for the purposes of the bk.

[fltoo]

It's not an expense. It is depreciating an asset for a deduction to lower the profit of a business.

[kathy4530050]

Good. That works for me. For my car, I go the mileage, not depreciation route anyway.

And last year was very financially complicated--not really a problem, but there's no way I could do my taxes by myself and so my accountant has taken over. No Turbo for me this year! Hopefully, next year will be a whole lot cleaner and simpler. AND . . . on that note, I am inspired to start a new thread . . .

[CatsInTrouble]

WEll, I went and did a line-by-line with my lawyer for my biz expenses. He did this because he said that BK expenses are MUCH more stringent than IRS expenses. THe things you named were all things he ok's. Here's what he got rid of, though:

1) Mileage
2) Food and bev/per diem

These are things that he said were OK witht he IRS, but not with the trustee (for my biz).

[OhioFiler]

It's not an expense. It is depreciating an asset for a deduction to lower the profit of a business.

Actually, it is an expense. However, what the BK court is looking at is more of a cashflow statement than an income statement(which is what the IRS is looking at. On a cashflow statement the depreciation expense is added back to arrive at your true net inflow and outflow of cash.