Auctioneers have the opportunity to deduct several business expenses, such as rent payments for office space and payroll for employees. The government defines deductible expenses as those that are “ordinary” and “necessary.” In other words, Auctioneers must commonly incur the expenses, and they must be appropriate to running the business.
It’s a good idea to check with an accountant concerning all of your business expenses, as deductions oftentimes must be amortized over many months. Also, Auctioneers should keep copies of all of their business-related receipts.
Tips for deductions
Deductible expenses include the following:
1. Home office – You can deduct the percentage of your home used substantially and regularly for business, and deductions can include utilities, mortgage interest and maintenance
2. Travel – If completely business related, this deduction can include tips, dry cleaning and 50 percent of your meals
3. Interest – The money you borrow for business activities is a deductible expense
4. Retirement – Whether the plan is for your or your employees’ retirement, there are tax advantages to saving money for this purpose
5. Continuing education – If it’s related to the business you’re already in, you could deduct costs of seminars, conventions and classes, such as those for your CAI, AARE and BAS designations
6. Auto – Although actual expenses (repairs, insurance and maintenance) can provide larger deductions, business owners usually choose to deduct mileage, parking fees and tolls
7. Advertising – Keep in mind if you sign multi-year advertising agreements the deductions must be spread throughout those years
8. Telephone and Internet – The portion of these costs you deduct must be used solely for business purposes
9. Insurance – Premiums are deductible for one year or less
10. Charity – If you give to St. Jude Children’s Research Hospital or other causes, be sure to keep all of your receipts for contributions of money, inventory or property