7 Last-Minute Tax Deductions for Private Investigators
- March 26, 2012
- by PInow Staff
- Business Tips
Editor's not: The information included in this article is general and should not be substituted for professional tax advice. Though PInow encourages you to consider these deductions while preparing your taxes, please consult with a tax advisor or attorney before filing for these deductions.
April 16th, the last day for filing taxes, is approaching swiftly and many private investigators might be looking for additional deductions before sending their information in. With the economy still in recovery mode no matter how large or small the deduction every little bit counts. Investigators can also visit the Internal Revenue Service (IRS) website for more information on qualifying for deductions and filing taxes.
Here are 7 last-minute tax deductions for private investigators:
- Association membership dues
As a great opportunity for networking, continuing education and keeping up-to-date on changes within the profession it’s never been more important to join your local and state associations. Membership fees are tax deductible, but make sure you have proper documentation of how you paid your dues and how each association is related to your profession.
- Investigation-related publication subscription fees
Whether it comes from your association president, the magazine shelf in the grocery store or even if it’s an online magazine, subscriptions to relevant publications are tax deductible. Make sure you hold onto your receipts and only write off subscriptions that relate specifically to your profession.
- Business-related travel expenses
With state, regional and national association meetings and events happening throughout the year, every private investigator should take advantage of professional networking and education opportunities. A percentage of transportation costs to and from these events including airfare, cab fare, parking, hotel and meal costs can be deducted as business-related travel expenses.
- Home office deductions
As with all deductions there is a set of specific criteria private investigators must meet in order to qualify for a home office deduction. The most basic guideline states that the square footage written off must be used exclusively for business purposes. If you work from a home office you may be eligible for deductions based on the percentage of your home dedicated solely to your business as well as additional costs for heating, electricity and work-related Internet use.
- Charitable donations
Whether it’s a monetary donation or one of canned goods, trash receptacles or backpacks there are many instances where private investigators can write off donations to charity. If your company makes a donation to an IRS-recognized charitable organization the cost is tax-deductible. Eligible organizations include The Salvation Army, Red Cross and Boy Scouts, nonprofit schools and hospitals, veteran groups and religious organizations. Additional donations to government entities are also tax-deductible provided the donation is used solely for public purposes.
- Business supplies and marketing materials
There are numerous deductions for business supplies, even for parking and postage costs. Equipment, materials and marketing expenses are all tax-deductible. Eligible marketing expenses include website expenses, online directory and network listings, promotional expenses and advertising costs. Office furniture and equipment including printers and computers both new and used are also tax deductible. Investigators should be mindful of where they are are shopping for supplies and equipment, however, as purchases from a local grocery store’s office supply aisle will look more suspicious on paper than those made at an office supply store.
For private investigators who also operate as process servers or fugitive recovery agents, deductions for mileage and other car-related costs can have a huge impact on their taxes. With a car that also functions as a mobile office, surveillance vehicle and lunchroom many private investigators are eligible for transportation-related deductions. Check with the IRS website and your accountant to see whether you qualify for the standard mileage rate or the actual expense deduction.
It's important to make every effort to understand their taxes and how they can qualify for additional deductions. A simple change in the setup of your home, for example, can help you qualify for a home office deduction. In a profession that often qualifies for less-common and “red flag” deductions, private investigators should be organized and prepared for a possible audit. Hopefully these tips have educated you on the deductions your firm deserves. Be sure to check the IRS website and consult with your accountant or attorney to find if you qualify for these and other deductions.
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