Question of the day August 27, 2025
What's a business expense that you think is completely worth the cost?
Leave a comment below and let us know.
Decoding Business Expenses
Are You Missing Out on Deductions?
Understanding business expenses can feel like trying to solve a puzzle with half the pieces missing. Many business owners spend countless hours tracking their costs, only to worry if they're claiming the right things or, even worse, if they're missing out on valuable deductions. The good news? It doesn't have to be that complicated. A business expense is simply a cost that is "ordinary and necessary" for your industry. But what does that really mean? In this guide, we'll demystify business expenses and help you confidently identify what you can deduct. We'll also cover some common expenses you might be overlooking and give you a simple system to track everything all year long.
What Exactly is a Business Expense?
According to the IRS, a business expense must be both "ordinary and necessary" for your trade or business. While that might sound a bit vague, it's actually a straightforward concept:
Ordinary: An expense that is common and accepted in your industry.
Necessary: An expense that is helpful and appropriate for your business.
For example, for a freelance photographer, a new camera lens would be both an ordinary and a necessary expense. Similarly, for an independent web designer, software subscriptions like Adobe Creative Cloud would be considered both ordinary and necessary. The key is that the expense must be directly related to generating revenue for your business, not for personal use.
Common Overlooked Deductions
Many business owners are great at tracking obvious expenses like office rent and payroll, but they often miss a few key deductions that can add up over the year. Make sure you're not leaving money on the table.
Home Office Expenses: If you run your business from home, you can likely deduct a portion of your rent or mortgage, utilities, internet, and even property taxes. The key is to have a dedicated, regularly-used space for your business.
Continuing Education and Subscriptions: Costs for professional development, such as online courses, workshops, and seminars, are often deductible. The same goes for subscriptions to professional publications and software that helps you stay current in your field.
Bank Fees and Interest: Did you know you can deduct business-related bank fees, credit card interest, and loan interest? Make sure to separate your business and personal accounts to make tracking these expenses easy.
Vehicle Use: If you use your personal vehicle for business-related travel, you have two options for deductions: a standard mileage rate or the actual expenses (gas, oil, repairs, etc.). Keep a detailed mileage log to track your business-related trips.
Advertising and Marketing: The costs of promoting your business, from website hosting and social media ads to business cards and professional photography, are fully deductible.
Best Practices for Tracking Expenses
Knowing what to deduct is only half the battle. The other half is having a reliable system to track everything. A little organization throughout the year can save you a mountain of stress and money come tax time.
Separate Business and Personal Finances: This is the single most important tip. Using a dedicated bank account and credit card for all business expenses makes it easy to track your spending and prevents confusion.
Keep Digital and Physical Records: For every expense, save both a digital and a physical receipt. Consider using a scanner app on your phone to immediately capture receipts and store them in a cloud-based folder.
Use Accounting Software: Tools like QuickBooks Online are a game-changer. They allow you to easily link your bank accounts, categorize expenses automatically, and generate accurate reports with just a few clicks.
Schedule a Weekly Review: Instead of a massive clean-up at year-end, set aside 15-30 minutes each week to review and categorize your transactions. This small, consistent habit will keep your books clean and accurate.
Don't Overlook Small Expenses: Those small purchases—a coffee with a client, a business-related app, a pack of printer paper—add up over time. Make sure you are tracking every single one.
Mastering business expenses isn’t about being a tax expert; it's about being organized and proactive. By understanding what to deduct and building a consistent system for tracking, you can save money, reduce stress, and gain a clearer picture of your financial health. Ready to stop worrying about your expenses and start using them to your advantage? At Jetty Wave’s Bookkeeping, we help business owners like you implement these best practices and ensure you never miss a deduction.
We're here to help. Contact us today to learn how our services can simplify your bookkeeping and help you keep more of your hard-earned money.
Question of the day August 26, 2025
What's the biggest financial lesson you learned from a mistake?
Leave a comment below and let us know.
How to avoid that ‘Tax-Season’ stress
The calendar flips to a new year, and for many business owners, a familiar feeling begins to creep in: tax season dread. That frantic scramble to find every last receipt, the late nights spent trying to reconcile your accounts, and the nagging fear that you’ve missed something crucial. It’s a stressful, time-consuming process that takes you away from what really matters—running and growing your business. But what if tax season didn't have to be a scramble? What if it could be a simple, straightforward process? The secret to a stress-free tax season isn't a last-minute miracle; it's a clean ledger all year long.
The Problem: The "Tax Time Scramble"
For many business owners, tax season is an annual fire drill. It’s the desperate search for that one lost receipt from months ago, the panicked late-night session of trying to categorize a year's worth of transactions, and the gnawing feeling that you’re leaving money on the table because your records aren't complete. This chaotic approach doesn’t just cause stress; it costs you time, money, and peace of mind.
The Solution: A Clean Ledger All Year
What if you could approach tax season with calm and confidence? The key is to maintain a clean, organized ledger throughout the year. When your books are tidy, you can quickly and accurately generate the reports your tax professional needs. This proactive approach saves you from the last-minute panic and ensures you're ready long before the filing deadline.
How We Help: Your Partner in Year-Round Prep
This is where Jetty Wave’s Bookkeeping comes in. We offer a "Clean up/Catch up" service specifically designed to get your books back on track and can discuss continued service to help you stay ahead.
A typical clean-up project involves a few key steps:
Initial Review: We'll start by looking at your current financial records to identify exactly what needs to be organized and reconciled.
Reconciling Accounts: We’ll compare your bank and credit card statements with your financial records to ensure every transaction is accounted for.
Categorizing and Organizing: We'll categorize all of your transactions and organize your financial documents so they are logical and easy to access. This includes reviewing and cleaning up your sub-accounts like accounts payable, accounts receivable, payroll, and expenses.
Generating Key Reports: Once everything is clean, we'll provide you with up-to-date reports like your P&L and Balance Sheet, giving you a clear financial snapshot of your business.
By taking these steps, we don't just fix past mistakes—we set you up for future success. Once your books are clean, our ongoing services can help you keep them that way, making tax time a breeze.
Financial Health Questionnaire
Hey there, small business owner! We know you wear a lot of hats, and keeping track of your finances can be one of the most stressful parts of your day. We're putting together new content to help you solve your biggest financial headaches, and we want your input. Please take a few moments to answer our quick questionnaire by leaving a comment below or sending an email to info@jettywaves.net to remain anonymous, and help us help you!
Section 1: Your Day-to-Day Financial Life
What's the one financial task you dread doing the most? (e.g., reconciling accounts, managing invoices, payroll, etc.)
How many hours per week do you spend on your bookkeeping?
On a scale of 1-10 (1 being "total chaos," 10 being "perfectly organized"), how would you rate your current financial records?
Section 2: The Bigger Picture
When you think about the future of your business, what is your biggest financial concern? (e.g., managing cash flow, preparing for taxes, securing a loan, etc.)
What's the one financial skill you wish you had? (e.g., reading a balance sheet, creating a budget, forecasting profits, etc.)
What's the biggest "aha!" moment you've had about your business's finances?
Section 3: What You Need
What topics would you like to see us cover in future blog posts?
Do you have a specific financial question you'd like answered by a professional bookkeeper? (We might feature your question—anonymously, of course!—in a future Q&A post.)
Thank you for your valuable feedback! Your answers will help us create content that truly helps you tackle your biggest financial challenges.