Can I Write This Off? 2024 Guide to Deductions

There are two words that every business owner loves to hear: tax write-off. As a business owner, you can deduct business expenses that, according to the IRS, are “necessary” and “ordinary.” In other words, expenses that are necessary and appropriate for your unique business operation.

But what’s “necessary” to one business owner may not be to another. Naturally, there’s a lot of confusion, and at this time of year, I’m constantly asked, “Can I write this off?” 

Let’s look at some of the most common questions I’m asked about write-offs.

Can I Write Off Gym Memberships?

If you have a gym membership, you may wonder whether it qualifies as a necessary business expense. Typically, gym memberships are seen as personal expenses and are not deductible on your tax return. 

But there are exceptions. For example, if you’re a personal trainer, the gym may be a necessary and ordinary part of your business operation. In this case, yes, your membership may qualify as a write-off. 

Otherwise, you don’t need to go to the gym to run your business, so it doesn’t qualify as a legitimate expense.

Can I Write Off Meals?

Business meals can be tax deductible if they are necessary or directly related to your business. Recent legislative changes have caused some confusion about this deduction.

The Tax Cuts and Jobs Act sharply limited meal and entertainment deductions, except for a few specific circumstances. Then, in 2021-2022, business meals were 100% deductible to encourage support for restaurants during the COVID-19 pandemic.

As of 2024, business meals are 50% deductible.

To qualify for meal deductions, your receipts must have the following information:

  • The date of the meal.
  • The total cost of the meal, including tip and tax.
  • A note or an indication of the business purpose of the meal. For example, “A meal with a client to discuss a new project.”
  • The names and relationships of the people involved. Include the names of all attendees and their business relationship to you (employee, client, partner, etc.).

You can also write off other food-related expenses in some cases. For example:

  • Office snacks and meals are 50% deductible
  • Company-wide parties are 100% deductible

But what if you entertain clients, for example, by taking them to a golf game or concert? Unfortunately, entertainment is no longer deductible. 

Can I Write Off Clothing?

Quality, professional clothing is an investment. Depending on your industry, you may even consider it an essential part of doing your job. But does it qualify as a write-off?

Clothing expenses are only deductible if they are:

  • A uniform
  • Specialized work attire that is not suitable for everyday wear

Unfortunately, general business attire doesn’t count. Sorry, but you can’t deduct your Gucci belt.

Can I Write Off Gifts for Clients?

Over 60% of corporate gifting goes to clients because it’s a great opportunity for branding and to show appreciation to your clients. If you already sent gifts to your clients, it makes sense to question whether or not you can deduct some of the expense.

And you can.

You can spend as much as you like on your clients’ gifts, but you’re limited to $25 per recipient per year in deductions.

For example:

  • You send a $50 gift to a client
  • You can deduct $25 of the $50

However, keep in mind that the wording in the law is “per recipient.” If you spread the gift-giving to multiple people in a business, such as the key partners you work with, it will allow you to deduct more expenses.

Can I Write Off Education or Training Expenses?

Businesses invest in education and training to remain at the forefront of their industries. You’ll be happy to know that if the training relates to your professional expertise, you can write it off as a business expense.

You can write off a lot of educational material, such as:

  • Subscriptions to industry publications (i.e., magazines)
  • Books that relate to your industry 
  • Classes or courses, online and offline
  • Webinars and seminars that you may pay for
  • Workshops

If you’ve been holding off on training or education expenses, this is an excellent opportunity to increase your knowledge and save some money in the process.

Can I Write Off My Car?

Do you use your own personal car for business? You can deduct your car expenses and save some money come tax season. You can do this in two main ways, according to the IRS:

  1. Standard mileage rate: If you want to use the standard mileage rate, you must own or lease the vehicle. You cannot operate more than five vehicles at the same time for your business and you cannot claim a depreciation deduction outside of the straight-line method. You do need to meet a few requirements to deduct using the standard mileage rate.
  2. Actual expenses: If you use your vehicle a lot, you may find the actual expense deduction to be better for you. You’ll need to keep a paper trail of the expenses, which can include maintenance, insurance, gas, depreciation, and other costs.

Should you use the standard mileage rate or the actual expense rate? You should speak to a CPA who focuses on business taxes to determine which method will provide the best savings for you.

In 2024, the mileage rate is $0.67 per business mile driven. Annually, the IRS will revise this figure up or down. You’ll need to be cautious of the wording because you can only deduct “business miles,” which means tracking the mileage you drive your vehicle for business or personal reasons.

If you’re questioning whether you can write something off, it’s better to sit down with your CPA and ask. You should try to deduct any expenses that you can – legally. It’s better to talk to your accountant and ask than it is to miss out on deductions.

Every small deduction adds up and will keep more money in your personal and business bank accounts.

Remember, you want to pay your fair share of taxes without having to pay a penny more than is necessary under current tax laws.

To learn more about what you can write off and how to maximize your write-offs, schedule an appointment, click here

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