Are business expenses tax deductible – Do you come to me to ask for soups? Well, you know that I feel like a second-rate dish, and also, the superheroes of the papers have feelings.
What are deductible expenses?
Deductible expense is linked to the economic activity of a self-employed person or a company and is allowed to deduct tax, that is, subtract it from your business income and thus pay fewer taxes.
The Treasury allows you to deduct it in two ways:
One is for the VAT, that this expense has and that you will include in the quarterly tax declaration. And another, for the payment itself and which is included when you make the Income Statement.
Until here, yes? Pilot huh?
For an expense to be tax deductible, it is necessary to have adequate justification (generally a complete invoice), to be recorded in the company’s Expense Book and authorized by the Treasury.
Let’s see how I’ll tell you: the Treasury looks at this type of deduction with a magnifying glass, it belongs to the Brotherhood of the Virgin of the clenched fist so that you understand me.
And that’s where the moves arise: how to justify those expenses when you work at home: electricity, water, gas, internet rate, etc. and what percentage of that expense you can deduct.
In all these cases, the Treasury places the funnel on the narrow side for you and on the wide side for her.
Many freelancers and entrepreneurs deduct all the expenses that fall into their hands, like crazy, without considering whether or not they are deductible. They put it all
But then Paco comes with the sales, that is, the Treasury with the sanctions.
Examples of deductible expenses
Surely you want the most complete list of deductible expenses possible, so get ready!
They are the acquisitions of goods (merchandise, raw materials) made to third parties for economic activity.
Wages and salaries
They are the amounts paid to a third party for a labour relationship: salaries, extraordinary payments, per diems and payments in kind.
But be aware of the fact: if it is about members of your family unit, you can only deduct it if:
- It is a regular and continuous job
- Live with the self-employed
- There is an employment contract
- There is a Social Security affiliation
- The remuneration set in the contract is not higher than the market
They are the payments of the Social Security or Mutual Societies of the workers and your own self-employed quota.
Other personnel expenses
Such as training , compensation derived from the personal relationship and insurance .
Leases and royalties
They are rents, fees and technical assistance.
So that you can deduct the leasing or financial lease fee :
- The lessor must be a credit financial entity or establishment.
- Minimum duration of two years for personal property, and 10 years for real estate.
- That the fee is stated in the contract and that the value of the purchase option and the financial charge, that is, interest, are not included.
Reparations and conservation
All maintenance and repair costs are included . Look around if you have bills for any repairs.
Those whose purpose is an expansion or an improvement are not included , because these investments are amortized over more than one year.
Services of independent professionals
Import satisfied professionals , such as managers, lawyers, solicitors, economists, notaries, auditors, advisers, the computer scientist who makes the web page or a custom program, etc.
Other external services
They include: research and development expenses, transport expenses, banking services , publicity , electricity, etc.
Tax deductible taxes
Such as the Economic Activities Tax (IAE) and the Real Estate Tax (IBI).
Penalties, enforcement surcharges and the surcharge for late filing of returns are not included.
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It refers to the expenses that the Bank charges you, for example for the discount of Bills or receipts, to the surcharges and interest for deferrals and installment of debts, among others.
Take a good look because surely you have many bank expenses.
Debtor insolvency losses
If the loss is due to the possible insolvency of the debtor who has defaulted you, it will be necessary that:
- Six months have elapsed since expiration.
- The debtor is declared bankrupt.
- The debtor is prosecuted for the seizure of assets.
- The obligations are legally claimed.