When it comes to tax deductions and business expenses, business owners can often fall into two extreme mindsets, either trying to deduct everything under the sun or being too conservative and missing out on legitimate tax savings.

In this episode, Danielle Hayden, CEO and founder of Kickstart Accounting, Inc., and Kelsey Chester, Kickstart’s Lead Account Manager, break down tax deductions in a way that’s clear and strategic. They’ll walk you through what truly qualifies as a business expense, how to avoid common tax mistakes, and why smart financial planning is about more than just lowering your tax bill, while still claiming the savings you deserve.

Key Takeaways: 

• Understand the “Ordinary & Necessary” Rule: The IRS allows deductions for expenses that are common in your industry and essential for running your business. If you can clearly explain the expense’s purpose in an audit, you’re likely in the clear!

• Avoid IRS Red Flags: Overspending on out-of-the-ordinary purchases or misclassifying personal expenses as business ones can trigger unwanted IRS attention.

• Your Business’s Health & Goals Matter: Trying to write off too many personal expenses can hurt your ability to get business loans or sell your company later. 

• Separate Business & Personal Finances: Keep all business expenses on a business account or card to ensure clean, organized records. Your bookkeeper can only track and make deductions based on what they see in your business accounts. 

• Smart Travel Deductions: Business travel is deductible, but the primary purpose must be work-related. A "board meeting" at Disney with your family? Not so much.

• Invest in the Right Money Team: Your bookkeeper, accountant, and tax strategist should be working to keep your finances organized, tax-efficient, and strategically planned all year long, not just at tax time.

• Think Long-Term with Tax Strategy: Lowering your tax bill is great, but don’t do it at the expense of your business’s future. Plan ahead so deductions today don’t limit growth opportunities tomorrow.

Topics Discussed:

What Qualifies as a Business Expense? (00:00:06 – 00:02:14)

Finding the Right Balance with Business Expense Deductions (00:02:14 – 00:05:37)

The Importance of Paying Yourself a Reasonable Compensation (00:05:37 - 00:07:45)

Common Business Expenses & What You Should Be Deducting (00:07:45 – 00:12:55)

Operating & Personal Expenses: What’s Deductible? (00:12:55 – 00:20:52)

Travel Expenses: What’s Legitimate vs. What’s Risky (00:20:52 – 00:22:54)

Tax Strategy & Planning with Your Money Team (00:23:39 – 00:29:25)

 

Resources:

Episode 211 | The Smart Way to File Taxes: Why Tax Extensions Are Better Than Last-Minute Filings

Episode 212 | How to Pay Yourself as an S Corp Owner: Reasonable Compensation & Payroll Setup

Episode 213 | The Tax Write-Offs You’re Missing as a Business Owner

Episode 126 | Small Business Gift Giving: A Holiday Tax Guide

Episode 136 | Health Care Tax Deductions for Small Business Owners Explained 

Episode 137 | Can You Legally Hire Your Children?: How to Pay Your Kids, Get Tax Advantages, & Create Generational Wealth

Episode 188 | Beyond the Business: Preparing for a Secure Retirement

 

KSA Tax Partners | https://ksataxpartners.com/ 

 

Book a Call with Kickstart Accounting, Inc.:

https://www.kickstartaccountinginc.com/book 

 

Connect with Kickstart Accounting, Inc.:

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