Term: Tax write off
What can I write off on my taxes?
When filing your taxes, you can write off any expense that’s involved in the running of your business. This could include office rent, equipment and business travel.
The IRS states you can only write off a business expense if it’s:
ordinary – common in your line of work, and
- necessary – helpful for your business (but not necessarily indispensable)
This means buying a camera is a legitimate business expense for a photographer – but not for a writer.
You can’t write off personal expenses, like groceries. But if an expense is partially personal and partially business, you can claim the business component. If you buy a new cell phone and use it for business 80% of the time, you’re allowed to deduct 80% of that cost.
Regardless of what you’re writing off, make sure you keep receipts of all your expenses. Keeping proof of your expenses will keep you out of trouble if the IRS audits you.
Tax write offs can save you hundreds of dollars a year – but they can be complicated. It’s worth checking with an accountant or tax agent to make sure you’re claiming the right things.