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Wrapping up Summer Expenses: What Can You Deduct?


As summer winds down and fall arrives, it’s time for businesses to wrap up the busy season and review their summer expenses. From seasonal promotions to company events, summer often brings an uptick in activities—and with it, a surge in costs. Taking the time to assess which of these expenses are deductible can help you close out the season on a strong financial note and set your business up for a smooth transition into fall. Here are some key areas to consider when finalizing your summer business expenses.

1. Travel Expenses

  • Deductible: Business-related travel costs such as airfare, lodging, and ground transportation (e.g., rental cars, taxis, or rideshares).
  • Non-deductible: Personal travel or the portion of travel costs unrelated to business activities.
  • Tips: Maintain detailed records of your business trips, noting the purpose, dates, and receipts for expenses to ensure compliance.

2. Meals and Entertainment

  • Deductible: 50% of meal expenses when dining with clients or conducting business meetings over meals.
  • Non-deductible: Entertainment costs (e.g., sporting events, concerts) are generally not deductible, though certain exceptions exist for events directly tied to business.
  • Tips: Always document the business purpose and the attendees involved in meal and entertainment expenses to justify your deductions.

3. Marketing and Advertising

  • Deductible: Expenses for summer marketing campaigns, including digital ads, promotional events, and printed materials like brochures or flyers.
  • Non-deductible: Personal expenditures or gifts unrelated to your business.
  • Tips: Track all marketing spend and maintain receipts and invoices to substantiate your deductions.

4. Employee Benefits and Events

  • Deductible: Expenses for company-sponsored summer events (e.g., picnics, team-building activities), as long as they are primarily for the benefit of employees and not overly extravagant.
  • Non-deductible: Expenses that primarily benefit shareholders or partners, or personal entertainment costs.
  • Tips: Ensure that events are inclusive and focused on employee engagement to qualify for deductions.

5. Office Supplies and Equipment

  • Deductible: Business-related purchases such as office supplies, computer equipment, or furniture made during the summer.
  • Non-deductible: Personal purchases or items not used for business purposes.
  • Tips: Keep thorough records and receipts for all office-related expenditures to correctly claim deductions.

6. Home Office Expenses

  • Deductible: If you use a portion of your home exclusively for business, you may be able to deduct a percentage of home expenses (e.g., utilities, rent, mortgage interest) proportional to the space used for business.
  • Non-deductible: Areas not used exclusively for business or personal living spaces do not qualify.
  • Tips: Keep accurate records of your home office setup and use, ensuring you calculate the business-use percentage correctly.

7. Professional Services

  • Deductible: Fees paid to accountants, lawyers, consultants, or other professionals providing business-related services.
  • Non-deductible: Personal legal fees or services unrelated to your business operations.
  • Tips: Maintain contracts, invoices, and supporting documents to back up your deductions.

Effectively wrapping up your summer business expenses is key to maintaining healthy cash flow as you transition into fall. By reviewing your summer spending, identifying deductible costs, and keeping thorough records, you can ensure you’re maximizing potential tax benefits.

As you close out the season, contact DK today for personalized advice on how to best navigate your business expenses this fall. We’re here to guide you through every step!

With warm regards,