Which expenses can I deduct from business tax?
September 29, 2022 | 50,00 EUR | answered by Isabel Möller
Dear tax consultant,
I am Tatiana Huber and I operate a small sole proprietorship in the online trading sector with handmade jewelry. Over the past few years, I have successfully expanded my business and have been consistently increasing my revenues. However, I am now faced with the challenge of preparing my business tax return for the past financial year and am wondering which expenses I can deduct from my business tax.
In the past, I have incurred costs for materials, advertising, shipping, as well as rent for my home office. Additionally, I have invested in purchasing new machinery and tools to improve the quality of my products and work more efficiently. All of these expenses have significantly contributed to my business success, but I am unsure of how they can be claimed for tax purposes.
I am concerned that I may have overlooked expenses that could help me reduce my tax burden. Therefore, I am reaching out to you for guidance. Which expenses can I specifically deduct from my business tax, and how can I ensure that I consider all relevant costs? Are there possibly other ways to optimize my tax burden?
I appreciate your assistance in advance and look forward to your professional advice.
Sincerely,
Tatiana Huber
Dear Mrs. Huber,
Thank you for your inquiry regarding your trade tax return for your sole proprietorship in the area of online trading with handmade jewelry. I am delighted to hear that your business is growing successfully and that you are able to continuously increase your revenues. I am happy to assist you with my expertise in answering your questions regarding the tax deductibility of your expenses.
First and foremost, it is important to understand that trade tax is levied on the profit of your business. This means that all expenses incurred for business purposes, which serve to generate or secure income, are generally deductible from trade tax. Deductible expenses include, for example, the costs you mentioned for materials, advertising, shipping, rent for your home office, as well as the acquisition of machinery and tools to improve product quality and efficiency.
In addition, there are other expenses that you may be able to deduct from trade tax. These may include costs for telephone and internet, office supplies, further education, insurance, bank fees, tax advisory fees, and also travel expenses related to your business activities. It is important to carefully record and document all business expenses to ensure that you do not overlook any deductible costs.
To further optimize your tax burden, you can also benefit from various tax incentives and depreciation options. For example, investments in certain environmentally friendly technologies or accessibility measures can be tax-supported. Depreciation of business assets such as computers, furniture, or vehicles can also reduce your tax burden.
I recommend seeking advice from an experienced tax advisor to fully exploit all possibilities for optimizing your business taxes. Together, we can discuss your tax matters and develop an individual strategy to minimize your tax burden and continue to lead your business successfully.
I hope that my detailed response has been helpful to you and I am available at any time for further questions. Thank you for your trust, and I look forward to assisting you with your trade tax return.
Best regards,
Isabel Möller
