One can save on medical expenses cost which is dollar to dollar deductions. This can add up quickly to save money for independent contractors when they make medical expenses out of pocket.
Independent contractors can deduct a standard mileage rate for every time when they used their car towards business. But it is always safe to keep a detailed log in their car to justify deductions in case of an audit.
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If independent contractors or entrepreneurs have their home as office then they are allowed to deduct a portion of the rent or mortgage. The amount is based on the percentage of their home that is a dedicated home office size of space and other rules will apply. The deduction doesn’t end with what one pay for the space, however, they can also deduct a percentage of the utilities and homeowner’s or renter’s insurance.
With regard to business gifts, independent contractors are allowed to spend $25 towards presenting a bouquet of flowers towards client’s visits and are absolutely and totally deductible. In case of entertaining with a bottle of scotch at $100 for the clients or new business prospects including the fellow contractors and entrepreneurs, $25 is deductible. One should have bills to justify accounts and be preserved during an audit.
Concerning Business travels, Independent contractors have upper hand in claiming most of their deductions during their business travel. They can deduct most of the costs made towards business cause. However the personal expenditures of buying things for their homes during business visit will be disallowed and there are more such exceptions. Tax professional can guide Independent contractors to the right way of tax deductions especially for frequent business travels.
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