5 More Tax Write-Offs For LLCs

February 12, 2021

As an LLC, or limited liability company, you’re entitled to a variety of deductions that reduce income tax payments. Review five more of the most common deductions your Los Angeles accounting firm wants you to know about. 

Charitable Deductions

Deduct donations to various charities to lower your payment. As long as they do not exceed 10% of your taxable income, you’re in good shape. Keep a list of your charitable deductions throughout the year for easy reference during tax time. 

Meals & Entertainment

Take off all meals and entertainment costs that relate to your clients. Perhaps you paid for business lunches with potential partners throughout the year, or took them to socially-distanced events in different states. As long as the expenses have to do with your clients or business as a whole, you can deduct them and reap the tax benefits. And while only 50% of business meals and entertainment expenses count as LLC deductions, you can deduct 100% of business travel costs. 

Interest

Subtract interest connected to business costs, including credit card, business loan, and lines of credit interest. It’s not uncommon for startup LLCs to take out loans and lines of credit, and pay for what they need with credit cards. Keep in mind that if some of the accumulated interest is for personal expenses, you must deduct a portion of that interest only. 

Tangible Property

Any tangible property you purchased on behalf of your LLC counts as a deduction. Office spaces, retail stores, restaurants, performance venues, and all other business-related property provides income tax relief. Tangible property such as equipment, tools, appliances, and other assorted supplies also count. 

Professional Expenses

Add all professional costs to your itemized deduction sheet during tax time. It costs money to maintain professional licenses and maintain other professional engagements, such as memberships with various associations. Any journals or magazines you subscribe to that relate to your business also count, as do training and continuing education classes, workshop and seminar fees, and trade show costs. Business insurance premiums count as well, such as those paid towards premise liability, general liability, malpractice, worker’s comp, and tangible assets protection. 

Discuss these and other LLC tax deductions with your Encino tax consultants at Wallace & Associates. The accountant service in Los Angeles provides professional tax consultation and prep services that streamline tax time.