What are consider business expenses?

Question

I am about to start in Real Estate, so I want to know what are consider business expenses. Are this?
Lunch/Dinner with client
Car (gas, miles)
Adverstising
Business Cards
Work clothes, etc.

I am 98% sure of all of those being business expense that I can deduct on my taxes but I am not sure about the work clothes, I just spend about $350 dollars in work clothes to look presentable now in January 2008 since that is when I am starting, also I just bought a $250 on a phone (treo) since that is the one that can unlock the lockboxes for when I am showing the homes, so would I be able to deduct that in 2009 when I do my taxes as a self emplyed?

Thanks

Answer 1

Advertising and business cards - yes

Lunch and dinner with client - 50% of expenses

Car - can deduct EITHER mileage or actual expenses like gas, not both. That's only for your actual business mileage, like going to look at the houses and taking clients around, not your commuting mileage from home to the office

Work clothes - no, since they would also be suitable for other than work, even if you don't wear them anywhere else. If they are specific to the job, like had the name of the real estate company on the back, then they'd be deductible.

Cell phone maybe, or maybe part of the cost - depends on a number of variables - talk to your tax preparer.

Answer 2

1

Answer 3

The clothes won't be deductible. The phone may be depreciated if you use it primarily for business.

Answer 4

business expenses are those related to your business activity. its easy to identify business expenses that are fully business related (like business cards and advertising) but expenses that are mixed (business and personal like car expenses) need to be well documented for their business related purpose.

Answer 5

Traveling by airplane for a business trip, not for leisure or pleasure.

Answer 6

Ask your accountant or tax preparer.