It is vitally important that you be able to properly determine all of the applicable business expenses for which you are entitled tax credits, exemptions, or deductions when operating a business.
For many businesses, the proper determination of such expenses can literally mean the difference between a profit and loss.
There are really two categories of tax deductions for business, the first is your legitimate business expenses and the second is your capital expenditures.
Business expenses are the costs you incur on a daily basis to run your business, they include things like rent or mortgage payments, purchase of goods for resale, advertising and marketing expenses, office equipment and supply costs, employee wages and salaries, utilities, telephone bills, Internet service provider bills, vehicle maintenance and expenses, clothing, entertainment, meals, and more.
Capital expenditures are assets that you must write off over time.
For example, if you purchase a new telephone system that costs $10,000, you must write off that cost over time, unless there is an immediate tax credit available.
These assets generally represent more than a $500 investment, and are depreciated over time.
For expenditures under $500, just write them off as a business expense, in full.
Some examples of capital expenditures would be buildings, equipment, computers and software, vehicles, and office furniture.
If you are in business, you should not attempt to do the bookkeeping or depreciation of assets on your own.
You should enlist the services of a CPA to determine the precise nature of all your business expenditures and keep track of them in detail.