November 28, 2009 
This entry was posted on Saturday, November 28th, 2009 at 11:54 pm and is filed under Accounting, Buisness Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
If you are self employed or a sole proprietor then you have to understand what business expenses and capital expenses are.
Business expense is the amount of money you have to pay to conduct your business. Usually they are common costs like rent for your business, traveling for your business and if you have any employees that you have to pay. These expenses are also tax deductible.
On the other hand capital expenses are related to the cost of purchasing things such as property or business related equipment. You cannot claim these as tax deductible but you can claim the depreciation, amortization or depletion.
It is not easy to determine if the expense is a capital expense or business expense. When dealing with the business tax deductions you might want to consider visiting the IRS website and check out the free tax training opportunities.