1. You have a cell phone? What percent of those calls are business related? Are all of them? Did you bring a bunch of pens from home? Where’d that printer paper come from? The stapler was in your desk at home so you brought it to work and now it’s the work stapler? All that stuff counts so make a list and say “Here accountant, work your magic.”
2. Measure the square footage of home space used exclusively for business. This isn’t just for work-from-home businesses. Is the overflow stock sitting in your garage? Measure it. Do you have a computer at home dedicated solely for work purposes because you can’t have the kids downloading their viruses and MP3s where you store work stuff? Measure the area it’s in.
3. Meals. Yeah you probably do the 50% for meals with vendors, subcontractors, prospects, etc. Did you know if you bring food 100% for employees 100% to improve business it may be 100% deductible? Not 50%? Be reasonable though, keep actual real track because nothing says “Hi IRS please audit me!” like hundreds of meal deductions at the end of the year.
4. Remember when you were being educated and you were completely broke because you didn’t have a business or even much of a job? Yeah, none of that is deductible. But now that you have a business, you can deduct school! Sweet. You need to prove it is work-related. Don’t try to pass off two-step classes as essential for running your corner market.
5. Your car doesn’t have to be a business car to deduct a portion of its use, you do need to keep track though. You can either do the cents/mile method, or probably smarter in most cases, the percent method. The percent of vehicle use will also include costs like maintenance, repairs, smog check, insurance, new tires, etc. It is essential you keep track though. You can use a notepad, write the before and after mileage to and from work, or there are apps that can do this. You simply subtract distance traveled through the year from the total mileage put on your car from the beginning of the year through the end, and from there you get the cents per mile or the percentage use. Easy if you track it.