Which expenses can I claim as a loss?
July 11, 2022 | 40,00 EUR | answered by Günther Köhler
Dear Tax Advisor,
I hope you can help me with my question regarding the profit and loss statement. My name is Oliver Dörr and I am a self-employed entrepreneur in the catering industry. In recent years, I have unfortunately noticed that my costs are rising and my profits are decreasing. Therefore, I am looking for ways to optimize my expenses and possibly claim losses for tax purposes.
I have already tried to inform myself about the various expense items that can be claimed as losses, but I am unsure which costs are actually deductible. For example, I have expenses for goods, rent, personnel, as well as advertising and marketing. In addition, there are regular purchases for the equipment of my restaurant, such as new kitchen appliances or furniture.
My concern is that I do not know exactly which expenses I can deduct for tax purposes and which ones I cannot. I want to make sure that I take full advantage of all opportunities to maximize my profits and minimize my tax burden. Therefore, it would be very helpful for me if you could specifically show me which expenses I can claim as losses and how I can accurately represent this in my profit and loss statement.
I thank you in advance for your support and look forward to your expert advice.
Sincerely,
Oliver Dörr
Dear Mr. Dörr,
Thank you for your inquiry regarding the profit and loss statement in your restaurant business. It is understandable that you are concerned about how to optimize your expenses and claim losses for tax purposes in order to maximize your profit. I would be happy to assist you and show you which expenses you can claim as losses in your profit and loss statement.
First and foremost, it is important to know that generally all expenses related to your business are tax deductible. This includes costs for goods, rent, personnel, advertising and marketing, as well as purchases for the equipment of your restaurant. You can record these expenses in your profit and loss statement as operating expenses and deduct them from your profit to determine your taxable profit.
When it comes to purchases for the equipment of your restaurant, such as new kitchen appliances or furniture, these are usually considered depreciable assets. You cannot deduct the full purchase cost as operating expenses immediately, but you must depreciate the costs over the useful life of the asset. This is called depreciation. The depreciation will then be taken as an annual expense in your profit and loss statement.
Furthermore, there are certain expenses that are considered non-deductible operating expenses, such as personal living expenses or fines. These expenses cannot be claimed in your profit and loss statement.
To ensure that you are maximizing all possibilities to optimize your expenses, I recommend that you carefully review your documents and potentially work with a tax advisor. A tax advisor can help you maximize the optimal tax planning opportunities for your restaurant business and assist you in preparing your profit and loss statement.
I hope that this information has been helpful to you. If you have any further questions, please do not hesitate to contact me.
Best regards,
Günther Köhler
Tax Advisor
