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May 22, 2024
Question

Tallie LLC questions 1-31, #13

  • May 22, 2024
  • 2 replies
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13. As the CEO of my LLC, can I deduct expenses returned by the client, considering I’m paying finance charges and interest on them? How should I handle these deductions to maximize tax benefits?

 

2 replies

May 23, 2024

To summarize, you made a purchase on behalf of a client and you were expecting to reimbursed for it by the client, but they returned it to you instead?

 

If you are able to return the item(s), do so. But, if you weren't able to return the items for any reason and they are deductible expenses, then you can still claim the expense even if you still have the item.

 

If the item is not deductible (see your previous questions and answers about clothing worn on cruise ships), then you could sell it to reduce your losses.

 

If possible, have your clients make at least a partial payment in advance of you purchasing things for them. Then you aren't stuck with charges on a credit card that you can't be paid back for.

 

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-- KimberW

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LindaSh
May 23, 2024

You may deduct expenses you pay for your business.  If such expenses are reimbursed by your clients, then you would reduce the expense amount by the amount of the reimbursement.

 

If the client does not reimburse you, you receive the full expense deduction.