How To Calculate Miscellaneous Business Expenses
Do you want to know how to calculate miscellaneous business expenses? Whether you own your own business or work for a company that does not reimburse miscellaneous business expenses, the cost of working can add up quickly. Whether its mileage, office supplies or a phone bill, workers and business owners can get a big tax break when they calculate and write off these expenses on their yearly federal income tax return forms.
- Maintain receipts to calculate miscellaneous business expenses. Throughout the year, collect and file away all receipts that reflect expenses used for business. If you are on a company trip, keep gas receipts. A cell phone or Internet service that is used for business purposes may also be tax deductible. Consider every expense such as business lunches, the cost of business cards and work attire, and record it in a ledger.
- Record your mileage as a business expense. While miles driven from home to work and back during a daily commute do not qualify, miles driven from one office location to another most likely do. This is most useful for workers like real estate agents who often drive to multiple houses and an office during daily activities. Keep a record of mileage in one location throughout the year for easy accessibility.
- Make sure your miscellaneous business expenses qualify as deductions. The web site of the Internal Revenue Service offers clear guidelines for business expenses. If in doubt, consult with a tax professional before claiming a deduction.
- Add up expenses (aside from mileage) before filing your taxes. Fill out the correct form, and enter the total expenses where asked. The form you use depends on your working status. Unreimbursed employee expenses can often be explained on IRS Form 2106 and then entered on line 21 of Schedule A for itemized deductions. For business owners, more extensive forms are required, including Form 4562 for depreciation and Schedule C for profit and loss from a business.