Other unlimited deductible business expenses
You can enter all expenses that have not yet been mentioned here. This includes, for example, your travel costs , telephone costs or advertising costs.
Difficulties in recognizing business expenses
As noted briefly earlier, there are costs for which it is not entirely clear whether they are business or personal. For example, with mixed-use items such as the PC, the car or your clothing. This can be solved in some cases by providing evidence (logbook) or the costs are simply inseparable. In this case, the following applies: You can deduct the costs, some of which are privately caused, if they are of minor importance.
Specifically, this means that they can make up less than 10%. Otherwise you have to assign and divide them objectively and without errors. This is also difficult, for example, with travel expenses, which can be viewed both privately and professionally. If the professional share is low, you can use it as advertising expenses or business expenses. If the private part is low (less than 10%), you can set the entire trip as a business expense. There are even guidelines for this from the Grand Senate of the Federal Fiscal Court (09/21/2009, GrS 1/06).
If your business expenses are not necessary or appropriate or inadequate ( Section 4 (5) EStG ), they can be rejected. This often happens with the expenses for company vehicles or the maintenance of luxury cars, yachts or airplanes. Fines (driven too quickly on the way to the next appointment) or fines, interest for tax evasion or excessive donations beyond the funding limit cannot be recognized at all. But too high and inadequate entertainment costs for your guests or gifts that are more than 35 euros will not be recognized.
Separation of private and business expenses
You cannot deduct all expenses that only serve your private life as business expenses, not even if they are triggered by your professional position or are important for promoting your activity. With these mixed costs, a limit for the “minor importance” of either the private or the business area is 10%. There are costs that you can easily separate and apportion, and costs that you cannot separate at all. If in doubt, you can estimate the costs. If you come under the tax subsistence minimum (according to the Bundestag 2018, this is 9,168 euros for single people in 2019), you cannot even apply the costs.
Costs that can be separated easily and properly are, for example:
- The costs for the use of the car, which can be separated using the logbook.
- The cost of your phone, which you can clearly separate according to your call list and the units used.
- In addition, the costs for your study can be broken down into square meters.
In contrast, non-separable costs are costs for …
- TV, PC or typewriter that you use privately and professionally.
- Literature (reference works, daily newspapers) that can be used both privately and for business purposes.
- normal clothing and shoes (i.e. no typical work clothing).
- Aids such as glasses or hearing aids that you have to wear all the time.
Business expenses from A to Z
In every company there are different costs that you can deduct from tax. Many of these have already been mentioned in the previous text. However , we give some key words here again for a simple overview:
- Depreciation (depreciation)
- Legal fees
- Contributions to professional associations
- Consulting costs (lawyer, tax)
- Business taxes
- Office costs (rent, material, cleaning)
- Specialist books and journals
- Financing costs
- Education and training costs
- Business and information travel
- Motor vehicle costs
- Personnel costs
- Moving costs
- Insurance contributions (no private insurance)
- Advertising expenses
These business expenses are not deductible
Since it is important to see what costs you cannot deduct, here are some examples as well. However, the list is not exhaustive and may look different in your individual case. The deductibility is based on Section 4 (5) and Section 12 of the Income Tax Act .
Examples – you cannot deduct this:
- Expenses for gifts that exceed the value of 35 EUR
- Inappropriately high entertainment costs
- Increased additional meal expenses that are above the fixed lump sums.
- Increased travel costs that are higher than the flat-rate distance allowance.
- Luxurious business representation expenses
- Interest on evaded taxes or debt interest
- Fines, administrative fines, warning fines and fines
- Trade tax for years from 2008
Post non-deductible business expenses
This depends on the expenditure, which you may be able to put on another account. Depending on which chart of accounts you use, you can post these costs under “Other non-deductible expenses”. In the SKR03 this would be 2308 and in the SKR04 account 6968.