By: Faizan Haq

Business expenses refer to the costs associated with running a business and are incurred in generating revenue. Business expenses are recorded on the company’s income statement. As stated by investopedia.com, “business expenses are also referred to as deductions.” Forecasting expenses and strategically meeting them is the way to manage business expenses.

• “Depreciation: Expensing of business assets is usually done by depreciation. Depreciation is a tax-deductible expense on the income statement and is classified as an indirect expense. Depreciation expenses can be deducted over the years. They typically include the costs of computers, furniture, property, equipment, trucks, and more,” according to investopedia.com.
• As outlined in the article by mileiq.com, “Review expenses regularly: Business owners need to review their expenses regularly to stay on top of their finances. This allows them to identify areas where they can reduce operating costs to save money, spot tax deductions to lower the company’s tax liability, and make more informed decisions about how to grow their business.”
• Charitable donations: Per insights from freshbooks.com, “You might choose to make charitable donations as part of your initiatives, which can help to attract new kinds of customers and employees. When making donations, it is important to understand the potential tax implications. According to the IRS, you can deduct contributions made to organizations, such as non-profit organizations, religious organizations, and certain educational institutions. It is important that the amount of the donation you can deduct may be limited, depending on the organization and the type of donation. The deduction for a donation of property may be limited to the property’s fair market value. The deduction for a cash donation may be limited to a percentage of the business’s taxable income. However, you can carry any donation that exceeds the limit to future tax years. Keep accurate records and receipts of these donations.”
• Adequate records: “Are Essential if you claim business expense deductions, you will need to have the books and records to substantiate those expenses. The nature of the documentation depends upon the type of expenses, but you need to be able to prove the amount and purpose of each expense. All taxpayers must keep accurate, permanent books and records to determine the various types of income, gains, losses, costs, expenses, and other amounts that affect their income tax liability. These records must be retained for as long as they may be relevant for any tax purpose. This applies to business expenses, as well as all other deductions and income items,” according to the experts at wolterskluwer.com.

It is important before you go through with doing any of this, always seek the help of a professional in this field.  A tax professional will provide extra assistance and advice for a smoother process.