Organize Your Expenses To Help Your Business

A yearlong categorization of expenses related to your footcare practice will benefit you in preparation for determining income tax

The end of the year is a great time to review your business operations. A critical part of this is tax preparation for your hoof-care practice. How prepared are you for reporting your business expenses?

In this column, I will focus on the United States-based farrier’s needs for federal tax preparedness. There are various ways to document business expenses for federal income tax purposes. One way is to organize expenses by categories listed in Schedule C of the Federal Individual Income Tax Return (Form 1040), the Federal Partnership Return (Form 1065) and the Corporate Tax Return (Form 1140).

The specific categories you decide to use will greatly depend on the particular information needs and how specific you want to be in your farrier business.

Where Are Your Expenses?

Here is a list of categorized expenses that you should consider. Utilizing these will save you time and simplify paper work come reporting time.

  1. Advertising Expenses. These expenses include the resources you utilize to promote your business, such as business cards, printed fliers, local newspaper listings or online display ads.
  2. Automobile Expenses. These are the operational costs for your business use of your vehicle, including gasoline, oil, maintenance, repairs and gasoline taxes. It goes well beyond repairs or the frequent fill-up, as these expenses also cover vehicle licenses, registrations, inspection fees, depreciation and any other operational costs.
  3. Bank Service Charges. This category includes all charges, interest and fees made to a bank related to your business checking or other business bank accounts.
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Esco buff 1215

Esco Buff

Esco Buff, CF, APF, is a farrier in Web­ster, N.Y., and holds a PhD in bus­iness administration. He is a member of the Interna­tional Horseshoeing Hall of Fame.

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