7 Process Server Tax Deductions Your Accountant May Have Missed
- April 01, 2012
- by ServeNow Staff
- Business Tips
Editor's note: The information included in this article is general and should not be substituted for professional tax advice. Though ServeNow encourages you to consider these deductions while preparing your taxes, please consult with a tax advisor or attorney before filing for these deductions.
March is coming to a close, and process servers might not be ready for April 16th, the last day for filing taxes. Hopefully, you’ve taken some time to organize and evaluate your expenses, but you may have missed out on some important deductions for your business. In a recovering economy deductions, both large and small are important and can add up.
Here are 7 tax deductions your accountant may have missed:
- Mileage and car-related deductions
With a car that functions as a mobile office, every process server should take advantage of deductions for mileage and commutes. Because all process servers must travel from their home or business location to multiple business-related destinations to meet clients, process servers are eligible for transportation tax deductions at the standard mileage rate or the actual expense method depending on a few factors. According to the Internal Revenue Service (IRS), “An ordinary expense is one that is common and accepted in your trade or business,” which includes commuting to different serves for process servers.
- Association membership dues
Being an active member in local and national associations help process servers stay up-to-date on technology, marketing, and industry news. As an added benefit to joining a process server association, annual membership fees are tax-deductible.
- Subscriptions to industry publications
Remember, when it comes to tax deductions those smaller write-offs can add up. Always hold onto receipts for subscriptions to industry-related magazines and publications as well as those from your association. Both are deductible.
- Charitable donations
Donations in the form of money or goods, such as school supplies, food or park benches to IRS-recognized charities can be deducted from taxes. Eligible organizations include nonprofit schools and hospitals, organizations like the Salvation Army, Red Cross, and Boy Scouts, veteran groups, religious organizations and donations to government entities for public purposes.
- Home office deductions
Process servers who work from home can claim a home office deduction, the amount of which is determined based on what percentage of your home is dedicated solely to business purposes. Professionals who qualify for a home office deduction may also be eligible for deductions relating to monthly utilities including heating, electricity, and Internet provided the use is work-related.
- Health Insurance deductions
In order to be eligible for a health insurance deduction, a process server must be self-employed or a sole proprietor for their business.
- Business-related travel expenses
Process servers should make every effort to attend national association meetings and other business-related conferences for networking. A portion of transportation costs including plane tickets, taxis, and parking as well as hotel and meal costs on business days can be deducted.
It’s important for process servers to understand their deductions and organize any relevant receipts. As professionals who may qualify for some less-common deductions, process servers may find themselves dealing with a future audit. Keeping everything organized and staying prepared will ease a headache if you do encounter an audit. Hopefully, these seven tips will help your process serving firm get the deductions it deserves, but before you file and start adding more deductions, check with the IRS website to make sure you qualify.
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