If you are in Sales, whether you are on your own or employed by someone else, there is a lot you can deduct on your taxes. We are just going to explore some deductions that are common and others most people do not think of.
- Home and Mobile Expenses: If you use your phone for business or work, you can deduct a portion of your mobile and home phone expenses, as it relates to your sales or business. If you are employed by someone else (W2 job), you can deduct the part of your phone expenses that is not reimbursed. If you use your phone 75% of the time for work business and the remainder of the time for personal reason, you can deduct 75% of your amounts paid through the year.
- Business Clothing: If you wear something to work, especially clothing with logos, that is not reimbursed to you and CANNOT be used as regular street wear, this is deductible on your taxes.
- Car Insurance: If you drive for your sales job, whether you are W2 employed or self employed, you can deduct the portion of your car insurance, equivalent to the percentage you used the car for work. In other words, if you used your personal vehicle 50% of the time for work (excluding regular commute to and from the office), you can deduct 50% of your car insurance and actual car expenses OR unreimbursed mileage driven (never both).
- Depreciation: One deduction item my clients, who are sales people, always forget, is depreciation. You can depreciate electronics used for work/business, vehicles and even your house (if part of it is used for business/work purposes). Depreciation is a very detailed deduction. It can be a bit time consuming when you first stake it, because it requires a lot of information However, once you have taken it for one year, it is easier to do so the next year and the next year, until the item(s) being depreciated, are fully deducted.
There are so many other deductions that can be taken, but these are the ones that most of my Sales clients do not know or often forget.