Retail Business Deductions?
by Chris Darby
(Hampton Roads, VA)
A partner and myself have begun selling merchandise on Ebay. We run the business out of an apartment. We are not incorporated, so i am wondering.... can the two of us get deductions on dinners, and lunches that we eat together? And anything we buy for the business is deductible, correct?
Supposedly anything that costs you money to make money should be deductible. But you must have receipts and be able to prove how that cost helped you make money.
Keep receipts for everything, even cleaning supplies and toilet paper. You need to keep your office (or apartment) clean and supplies topped up. And of course you also need desks, chairs, shelves, office supplies, pens, paper, etc. What ever you need to keep your business going should be deductible.
You are allowed to deduct 50% of entertainment costs ( in Canada anyways), but again you need receipts and to be able to prove how these costs helped you make money. I don't think the government will consider you feeding yourself as entertainment, but keep some of the more expensive diner receipts and tell them you took customers out to encourage their business, or had a long business meeting that required members to be fed.
I hope this helps in answering your question. The best advice is to keep receipts for everything
and have your accountant advise you on what you can and cannot claim.