What “other” business expenses are deductible? The generic term you see on your tax form may leave you scratching your head. Just what other expenses can you legitimately deduct?
While there’s no hard and fast rule, examples include insurance premiums, legal and professional fees, supplies you use in your business, utilities, auto expenses, and the deduction for certain energy-efficient commercial building property.
Here’s a guide for less obvious items.
* Like all posts you incur in your business, “other” expenses must be ordinary and necessary in order to be deductible.  In tax law, “ordinary” means normal, usual, or customary in the context of your business.
If you’re a commercial fisherman, for example, boat insurance is an ordinary expense. Other business owners may have a harder time justifying a deduction for boat expenses.  “A sport fisherman that doesn’t earn a living from fishing would only be able to deduct other business expenses, such as boat and fishing expenses, to the extent that they have tournament winnings and sponsorships income,” further explains Kevin Aaron, Tax Specialist for Simons Bitzer & Associates.
* An expense is necessary if it is appropriate and helpful to the operation of your business.
* Some expenses are only partially deductible. For instance, the cost of meals and entertainment must have a direct business purpose before you can claim a deduction. Even then, your deduction is generally limited to 50% of your cost.
* Certain expenses are specifically identified as nondeductible. Personal, living, or family expenses fit into this category, as do fines, penalties, political contributions, commuting to and from your job, and most lobbying costs.
Contact Simons Bitzer & Associates at (317) 782-3070 any time you have a question about the deductibility of a business expense. We’ll help you obtain the greatest tax benefit.