How can you deduct shipping expenses
Being a business owner is a complicated matter on its own. If you are not into accounting and finances, keeping track of all the expenses throughout the year could be a very tedious task for you. But why is it important to track shipping costs? Because come April, you might be able to deduct shipping expenses and save yourself some money. In order to do that, you need to know what does count as a write-off and what doesn’t. As a company that has experience in sending a shipping container overseas (and we do it on a regular basis), we have all the necessary knowledge on the subject. So sit back and enjoy while our professionals give you a brief lesson on shipping and expense deduction.
If you are a business owner, chances are that there are many different shipping expenses you will have to deal with. And all these different types of shipping costs might confuse you. But that’s what we are here for – to give you a clear overview of which expenses you can expect to stumble upon.
- For starters, there are shipping expenses that you will have to pay on supplies for your business.
- Secondly, and most commonly, we have shipping expenses that you pay when shipping your finished goods to customers.
- Thirdly, there are the shipping expenses that a customer will pay to you when purchasing your goods.
What do you need to know about tax deductions?
For starters, many people believe in the myth that you get the whole cost back when you lodge your tax return. The truth is that these deductions can reduce your ‘taxable income,’ which means that you get part of the cost back. You need to claim these expenses and deductions at tax time. After that, the deductions will be subtracted from your taxable income which will reduce the amount of tax you need to pay. It’s important to mention that these deductions don’t just work for business owners. You can also get a deduction after your local movers in Boise relocate you to your rental property. More specifically, you can get deductions on rental property expenses.
What’s also important to mention is that it’s easy to claim and deduct shipping expenses once you are ready. If you have done your research and you know what you are eligible for, you shouldn’t have any problems with the process. That being said, we have decided to take it upon ourselves to show you which expenses can be deducted. As a business that makes its living shipping goods to customers worldwide, we expect this will be particularly beneficial for you.
Deduct shipping expenses when shipping your goods to customers
Do you run an e-commerce business? Does your entire business rely on the goods you sell and that you send all over the world? Then it’s especially important for you to learn which expenses you can actually deduct at the end of the business year. Naturally, you want your merchandise to be ordered, as that means more profit. Luckily, this is considered as a shipping expense for your business, meaning it is tax-deductible.
When keeping track of these expenses, you will want to assign it to its own category. You have two choices: one, you can deduct it under the ‘office expense’ or, two, you can deduct it under the ‘other expense’ line on your Schedule C. Deducting shipping expenses is really something you will want to keep your focus on. For starters, you need to know exactly what falls under the term ‘shipping expense.’ Will you be able to deduct the amount you spend on temperature controlled storage Boise? Not likely! But are there other expenses you can deduct? Most certainly!
Which expenses can be deducted?
Let’s start with mail. Snail mail provides more benefits than just looking cool – it’s also tax-deductible. We here at Peasley Moving & Storage can tell you that it doesn’t matter much what you are sending – as long as it is business-related. If you are sending it for business purposes, you will be able to deduct the cost of postage, envelopes, delivery services like FedEx, and P.O Box rental fees. Plus, you will be surprised to know that the IRS will even allow you to deduct the cost of a messenger service – of course, if such a service is vital and necessary for your business.
And now for the big expense that people often forget to deduct – shipping fees. In case you have a business that relies on sending goods and, therefore, you experience a lot of shipping fees, you should know that those fees are tax-deductible. When you think about it, this is an excellent tactic to motivate and encourage new businesses. After all, we don’t know who wouldn’t be encouraged by free shipping.
What’s to be concluded?
Taxes can be a vexing and complicated thing. But if you are an owner of some big or small business, you really need to make the effort when it comes to learning everything there’s to know about it. If for nothing else then so that you can know in which instances you can deduct shipping expenses. Bear in mind that there’s a certain timeframe when you are eligible for the deduction. So do your work throughout the year, write down every expense in your books, and you will be able to get a deduction. After all, when you couple the cost of shipping with the cost of stamps and delivery services, rest assured that you will be able to get a considerable sum back.