COVID-19 Pandemic Tax Deductions for your Business
We’ve seen it with many clients – items business owners purchase are unique in the pandemic era. Now that it’s tax season, you’re wondering which of your 2020 expenses are likely valid tax deductions for your business. Let’s explore a few examples.
Tax deductible: masks, face shields and gloves for your employees to wear while working
Probably not tax deductible: your kids’ dinosaur and astronaut Halloween costumes that happen to have masks
Tax deductible: hand sanitizer and cleaning supplies for your business
Probably not tax deductible: that case of fancy European soap you bought for your home because it smells amazing
Tax deductible: signage and tape to remind your customers to practice social-distancing
Probably not tax deductible: the new privacy fence in your backyard to make sure the neighbors are “social-distancing”
Cancellation Fees & Deposits
Tax deductible: hotel and airline cancellation charges for that company retreat planned back in April 2020
Probably not tax deductible: non-refundable deposit at that Caribbean resort for a vacation you were supposed to take over the summer
Tax deductible: fee for that networking group you joined to forge new strategic partnerships as business has slowed down
Probably not tax deductible: fee for that dating site membership looking for romantic partnerships because you’re lonely during quarantine
Okay, we like to joke – it’s a coping mechanism. But all kidding aside, handling finances during a pandemic can be quite stressful. With so many new business expenses, changing legislation, and rules around those potentially forgivable loans, it’s easy to feel overwhelmed. Tracking all of your business expenses and doing year-round bookkeeping will make filing your taxes much easier. If you have questions, we highly recommend consulting a professional.
Check out our COVID-19 resource page for more blog posts, videos and helpful information for businesses during the Coronavirus pandemic.