Deducting Business Expenses
- Typical income tax deductions are accounted for on the schedule A form for an individual’s tax return. This only makes sense if you have more than ~$13,850, or $27,700 for a married couple filing jointly (as of 2023) of expenses to deduct from your income.
- Business expenses can be deducted from taxable income as well. These deductions are taken into account through the schedule C tax form. Schedule C deductions are used as
- This means that an individual can take the standard deduction for personal expenses, but then further reduce their adjusted gross income (AGI) through schedule C deductions.
- Source: https://www.irs.gov/publications/p535
Pass through Business Income
- In addition to claiming deductions on business expenses, you can deduct 20% of qualified business income from your income tax form. This is only for pass-through businesses (businesses in which business income is taxed as regular personal income on an individual’s tax return.
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