Business expenses that you can't write off

To piggy-back on my post about common tax-deductible expenses for studio businesses, here are some common expenses that unfortunately are not tax-deductible according to the IRS.

(Disclaimer: this post is educational in nature and is not meant to be tax advice. Always seek advice from a tax preparer for your specific situation.)

Business expenses that are NOT tax deductible:

Federal Income Tax: your business can pay it for you but it is a personal expense and therefore the IRS does not allow it as a business deduction

Business Clothing: unless it is uniform or costume that is only for business and cannot be worn any other time, yoga pants, exercise wear, or those fancy business shoes are not deductible

Self Care: I know gym memberships and massages are really vital to successfully running your business. However since they also benefit your personal life the IRS won’t accept those costs as business deductions. An exception could be if you are doing a business photo shoot and hire someone to do your hair and makeup specifically for the shoot— you can write that off.

Meals and Entertainment: Business meals are 50% deductible and you must have record of who the meal was with and what you discussed. Entertaining clients, however, is no longer deductible. Get this— if food and beverage are provided while you are attending a non-deductible recreational event with a client, make sure you pay for the food on a separate bill or separate out the lines on the receipt so that the meal can be 50% deductible. If the bill doesn’t specify what was paid for entertainment vs. food, the food can’t be written off. More info here.

Charitable Contributions: If your business entity is Sole Proprietor, LLC, Partnership, or S-corp, these contributions may be deductible on your personal tax return (Form 1040). If the payment (to a charity or not) is directly related to your business and is not a gift, it is a deduction for your business.

Link to the IRS for some additional light reading on business expenses ;)

Note: You still may choose to have your business spend money on these categories. Just make sure you communicate what the expense is clearly to your bookkeeper or tax preparer.