YOU ASKED: What can I take as a business expense/write off? (What does write off really mean?) Can certain things be business expenses (Bills tickets?) and is all the gas I use in my car okay to pay for with work money?
WE ANSWER: A write-off is an expense that can be deducted from your business’s taxable income, reducing the amount of tax you owe. For ECPs, this includes costs that are both ordinary (common in the eyecare industry) and necessary (helpful for your business).
Entertainment Expenses
While entertaining clients, such as offering Buffalo Bills tickets, might seem beneficial for business relationships, the IRS has tightened deductions. For ECPs, unless the entertainment directly precedes or follows a substantial and bona fide business discussion (still subject to strict scrutiny), it’s unlikely to be deductible. Instead, focus on educational events or product showcases that have a clear business purpose.
Vehicle Expenses
For ECPs who use their vehicle for business, such as visiting patients, attending conferences, or running errands for the practice, only the portion of vehicle use related to these activities is deductible. Keep detailed logs of mileage for patient visits, business errands, and travel to conferences to accurately separate business use. The IRS allows for deductions either through the standard mileage rate or actual expenses proportionate to business use.
Advertisement
Here are some common deductible expenses for eyecare business owners:
- Medical supplies and equipment: Purchases of glasses, contact lenses, diagnostic equipment, and other medical supplies are fully deductible.
- Accounting and tax services: Fees paid for these services, including financial management, tax planning, and tax return preparation, are deductible.
- Office expenses: Rent, utilities, office supplies, and any other expenses incurred in the day-to-day operation of your practice.
- Professional development: Continuing education, attending industry conferences, professional dues, and any other costs related to maintaining licensure and staying current in the field.
- Health insurance premiums: health insurance you provide for your employees.
- Software and subscriptions: Practice management software, journals, and other subscriptions relevant to eyecare are considered necessary business expenses.
Remember to maintain detailed records and keep receipts for all expenditures, including logs for business mileage.
