Categories That Can Show Expenses for LLC Company

When you need to pay taxes on the income you earned from your company in the USA during the year, you can deduct many categories from tax at the end of the year federal tax return.

Showing Expenses

Well, let's try to explain the subject a little more with a question and our answer to the question.

If you reside in Turkey, can you show many payments and expenses you make in Turkey for your company in Usa as expenses, deducting them from taxes?

Yes, you can deduct many expense categories from the tax payable in the USA.

In fact, you do not have to live in the USA or outside Türkiye or make expenses outside Türkiye. While living in Turkey, you can show your business-related expenses as expenses during the tax period.

Documenting Expenses is Very Important

Below, we will share some categories that can be shown as expenses for LLC companies, but first of all, it is useful to underline the most important point to be made before showing expenses.

Document your expenses!

Digitally scan or photograph and keep documents of all expenses you will incur for your company during the year.

You can easily do this by using a bookkeeping software, e.g. Keep Your Free Bookkeeping with Wave

After the tax declaration is made according to the expense categories you have shown, the IRS may conduct a possible tax audit in the future. At this stage, it is necessary to record documents such as receipts, invoices, account statements and credit card statements for each item that is expensed.

In case of a possible audit, your accountant can submit these documents to the IRS and pass the audit phase very easily.

Payment by LLC Company Credit Card is Not Necessary

It is not necessary for the expenses to be made from the credit card of the company in the USA, but it is very important that you use a credit card belonging to the company owner. When declaring an expense for the LLC company as an expense, use a card belonging to the company owner and mark the relevant line on the card statement at the end of the month and record it.

For cash expenses, if you have the means, have the invoice issued in the name of your company in Usa. If you cannot receive an invoice for your overseas company, definitely have the invoice issued in the name of the company owner.

In this way, you can easily show this invoice or receipt as an expense item and deduct it from taxes.

Which Categories Can Be Shown as Tax-Deductible Expenses?

Expenses in many categories that you make for your company formed in the USA can be shown as expenses. You can find some of them in the list below.

The important point here is to show reasonable items, and most importantly, expenses that you will actually incur for your company, instead of showing every expense as an expense.

You may also have expense items that you need to explore specific to your business or industry. To learn these, you can describe your work to your consultant and learn the categories in which you can show special expenses.

The list below includes items that a remote e-commerce LLC company owner can generally deduct from taxes.

IT and Computer Expenses

• Domain name and hosting service for websites
• computer, laptop
• mobile phone
• Computer components, printer, scanner, copier, cartridge, etc.

Expenses for Software and Cloud-Based Services

• Shopify memberships
• Cloud based software
• Operating system licenses
• desktop software
• accounting software
• domain, hosting,
• Google drive, one drive, dopbox,
• Email hosting
• Email marketing software etc.

Office Expenses

• Office rent (if you can invoice your company in the USA)
• Office stationery expenses
• Office cleaning and maintenance expenses

Postal Cargo and Transportation Expenses

Expenses for sending postage, cargo documents, etc. abroad related to your business

Travel and Business Expenses

• In this context, if you can document your business-related travel abroad, you can show it as an expense. For example: If you can document the round trip and travel expenses to the USA for business, you can show it as an expense.
• You can show 50% of qualified food and beverages during business meals and travel.
• International car rental expenses
• Hotel and accommodation expenses

Production, Raw Materials and Equipment

Product-raw material purchase, production costs, raw material purchase, machinery and equipment expenses

Advertising and Promotion Expenses

• Promotion expenses
• Digital advertising expenses (Facebook ads, Google ads, Bing ads
• Service expenses paid to agencies for digital design and software production
• billboards
• Business card
• Brochures, Posters
• Graphic design services
• web design services
• SEO service expenses
• Article services

Education Expenses

• Online Education expenses
• Mentoring expenses
• Expenses for consultancy services
• courses
• Seminars
• Books and online education platform expenses

Financial

• Mercurybank, Wise, Payoneer money transfer commissions
• Credit deductions received for the company
• Company credit card interest rates

tools

When you use your personal vehicle for business purposes, you can deduct a certain level of fuel and maintenance expenses from taxes. However, in order to prove this, you need to use an app to keep logs of how many kilometers you travel per year for work. Otherwise, if you cannot prove this when an audit is performed, you may experience big problems.

Company Formment and Business Startup Expenses

• LLC company formation costs
• Registered agent expenses
• Expenses related to your company such as virtual office and address
• Accountant and Consultancy expenses

All items in this list can be shown as expenses for tax deduction purposes in general. However, as we mentioned at the beginning of the article, the expenses incurred must be on behalf of the company or the company owner and must be fully documented.

You can consult a licensed consultant to learn more about expense items and similar tax-deductible expenses for your company.

The information provided in this article has been prepared entirely from personal experiences and by quoting from some websites. It does not replace official documentation and tax advice.