Tax Deductions for Your Nutrition Business

Don’t Miss These Tax Deductions

Car and Truck Expenses

The cost of operating the vehicle for business is deductible only if you have records to prove business usage. It is usually best to use the IRS standard mileage deduction rate of 53.5 cents per mile driven for business use. (2017 IRS standard mileage rates)

Commuting miles are not deductible.  You cannot count miles you drive that are commuting from home to your place of business, or from your last business stop to your home, but you can deduct all the miles between your first business related stop to your last business stop of the day.  If you run your business from home, you will count all of your miles traveled between your home office and other locations as long as there is a business purpose to the trip.

Salaries and Wages

Payments to employees are deductible. Payments that sole proprietors and LLC members taken from the business are considered to be “draws” on the business and therefore are not deductible.

Contract Labor

If you hire a contractor to help with the paperwork or contract dietitian to cover your vacation, the cost of such contract labor is deductible. Be sure that you issue Form 1099-MISC to any such contractor receiving $600 or more.

Rent on Business Property

The cost of renting space is fully deductible.

Depreciation

With the Section 179 deduction rules, you can deduct up to $500,000 for equipment purchases in a single year.

Supplies

Items used on a business are fully deductible.  Coffee served to clients and staff, postage for business mailings, printer ink, paper, and brochures are examples.

Utilities

Internet and phone charges are fully deductible. If you claim a home office deduction, the cost of the first landline to your home is not deductible. If you have a second line, it is a deductible utility cost.

Taxes

You can deduct licenses and regulatory fees and taxes on real estate and personal property.  If you have employees, you can deduct the employer share of FICA, FUTA, and state unemployment taxes.

If you sell any products, you will deduct state and local sales tax you charge on your goods and services.

Repairs

The cost of ordinary repairs and maintenance are fully deductible. However, costs that add to the property’s value must be capitalized and recovered through depreciation (although there are some exceptions).

Insurance

The cost of your business owner’s policy, malpractice coverage, and business continuation insurance is fully deductible. The cost of health coverage for self-employed individuals is not a business deduction, but instead, the premiums are deducted on the owner’s personal tax return.

Commissions

They are fully deductible.

Advertising

Advertising costs are fully deductible.

Travel

If you or staff members travel out of town on business, the cost of transportation (e.g., airfare) and lodging is fully deductible. Check the requirements explained in IRS Publication 463 to claim any travel deduction. However, local commuting costs usually are nondeductible.

Home Office

A portion of personal expenses of a home are deductible as a business expense if the home is used regularly and exclusively as the principal place of business, a place to meet or deal with clients or customers, or as a separate structure used in the business. The deduction includes both direct costs (e.g., painting a home office) and indirect costs (e.g., the percentage of rent or mortgage interest and real estate taxes that reflect the percentage of business use of the residence).

Legal and Professional Fees

Legal and accounting fees are fully deductible.

Meals and Entertainment

These costs are deductible only up to 50%. Thus, a business lunch is half on you and half on Uncle Sam. And the deduction can only be claimed if you substantiate the expense (see IRS Publication 463).

Rent on Machinery and Equipment

Fees paid to lease or rent items used in your business are fully deductible.

Interest on Business Debt

Interest on loans that the business takes usually is fully deductible as a business expense (e.g., interest on a line of credit or credit card used for business).

Employee Benefit Programs and Qualified Retirement Plans

The cost of employee benefit programs, such as education assistance and dependent care assistance, as well as contributions to employees’ qualified retirement plan accounts, is deductible. For self-employed individuals, contributions to their own qualified retirement plan accounts are personal deductions claimed on Form 1040.

 

 

About the Author

Stephanie Figon, MS, RDN, LD

Founder of NutriScape.NET. As a dietitian since 1992, Steph Figon has had experiences in consulting, 15 years in clinical, and has operated a private practice nutrition counseling office for since 2011. The RDNutriScape Instagram