Paying Taxes Guide

In many cases, the taxes that you pay on your business are generally deductible. But, not all taxes are deducted in the same way. For example, sales tax on the items that you buy for day to day operations are deductible because they are part of the cost of the item. But, you cannot deduct them separately. If you purchase something large that needs to be depreciated over time, then the cost of the tax is added to the cost of the car and depreciated along with the car’s cost.

If you pay federal income tax on business income, this is not deductible, ever. Your state income tax may be deducted from your federal tax return, but only as an itemized deduction. This cannot be done as a business expense. Do take the time to know tax laws regarding deductions of taxes themselves. They can be complex.