A list of 20 subjects that can be dropped with expenses that can be seen at a glance! Advantages, Disadvantages, and Points to Note |

A good understanding of your company's expense reporting is critical to ensuring that your company has the right tax savings to keep your company running smoothly. Therefore, in this article, we will provide an easy-to-understand explanation of the details and points to note for each item, along with a list that allows you to see at a glance the types of main expenses that can be recorded. If you want to be sure about what you can do with your company's expenses, please use it.

Contents

1. List of items that can be deducted as expenses [20 carefully selected subjects]

It is essential to manage each expense item by item when recording expenses. Here is an overview of the accounts for common “expenses” expenses and the details of each transaction. The details of each account are explained later, so please refer to them as well.

▼If you want to read about expenses exhaustively, click hereWhat is an expense? Easy-to-understand explanation of the basics of expenses such as expenses that can be recorded as expenses and costs that cannot be recorded

In addition to these, there are all kinds of account items, and the method of journal entry differs depending on the item. The "Accounts and Journal Rules Book", which is distributed free of charge on this site, provides comprehensive explanations from basic account items to examples of journal entries according to each item.

For those who are still vague about accounting and journal entries, it is a reference book-like material that can be referred to whenever you want to look it up, so please download it for free from here and take a look. .

2.What are the company's "expenses" in the first place?

Expenses are officially called "management expenses" and are expenses related to the company's business. It is the tax office that makes the final decision as to whether an expense is applicable. In addition, what corresponds to "expenses" in accounting is called "deductible expense" in the corporate tax law. However, it should be noted that the same expenditure may not be deductible for tax purposes, and expenses and deductibles may not always be the same amount.

The amount of corporate tax to be paid will change depending on how much the expenses are recorded. Corporate tax is a tax on profits, and profit is basically calculated by subtracting the amount of expenses from revenue. In other words, for the same income, the higher the expenses, the lower the corporate tax.

When deducting expenses as expenses, you need a receipt or receipt that proves that the expenses were necessary for the company's business. If you do not have a receipt, you must present a substitute as proof. For example, credit card history is usually evidence.

3. Precautions when using "expenses"

In a small company, personal expenses and company expenses are ambiguous, and the president's personal expenses are recorded as expenses. There is also However, only expenses related to the business of the company are covered. Never record non-expenses, such as personal expenses, as this is illegal tax evasion.

▼If you want to comprehensively read about recording expenses, click here When is the timing to record expenses? ｜Commentary on accrual and cash accounting that you should know in corporate accounting

4. Advantages of saving with expenses

The big advantage of saving with expenses is that it leads to tax savings. As mentioned above, the larger the amount of money that is dropped in expenses, the smaller the profit, and the lower the amount of corporate tax to be paid. In particular, corporations have large and diverse business costs. In order to make the most of the merit, let's be careful and manage it so that there is no omission in the expenses that can be originally reduced as expenses.

5. Disadvantages of using "expenses"

In order to reduce various expenses as expenses, it is necessary to save and manage receipts on a regular basis. Also, although the more expenses you record, the more tax-saving you can get, but if the amount is larger than the income, the profit will be negative. If you become in the red and you run out of cash that you can use immediately, your cash flow may deteriorate, so be careful.

6. 20 accounts that can be deducted from expenses

Accounts classify expenses by nature. Here, we will explain in detail each of the 20 main account items that can be deducted from expenses.

Local taxes such as enterprise tax and property tax, national stamp tax, automobile tax and real estate acquisition tax, which are paid depending on whether or not a company car or real estate is acquired, are applicable. Taxes and public dues are only for taxes that must be paid, and collections imposed when rules are not followed, such as delinquent taxes and local tax delinquency, are not recognized as expenses.

Rent and usage fees for renting offices, stores, warehouses, etc., parking fees for company cars, etc. In principle, management fees and common service fees can also be recorded as expenses. In addition, key money, renewal fees, and key money are subject to land rent if they are less than 200,000 yen.

Expenses for dining with business partners, mid-year gifts, year-end gifts, and other gifts are recognized as entertainment and entertainment expenses. In principle, the upper limit of the amount to be recorded is 8 million yen for companies with a capital investment of 100 million yen or less under the condition that the reason and amount are deemed necessary for business operation, and that the partner can be used as an expense. Please be careful when recording this item, as it is an item that can easily be checked by the tax office as an expense that can easily be confused with public and private matters.

Depreciation is the cost of dividing an asset whose value decreases due to deterioration over time according to the useful life of the asset. The useful life is stipulated by law for each asset. Items recognized as depreciation are, for example, expensive equipment such as personal computers and company cars.

The price paid by an external contractor, also called outsourcing cost. Examples of outsourcing fees include design costs for envelopes and business cards, and costs for outsourced system development. In addition, you can record the cost of electrical work that the construction company outsourced to another company.

Money paid to employees for their work, such as salaries, wages, bonuses, and retirement allowances. The amount that can be recorded as expenses is the amount before deducting taxes and social insurance premiums. In addition, wages in kind such as meals, clothing, and souvenirs are also subject to salary wages.

The cost of repairing or repairing equipment such as business buildings and personal computers can be recorded as repair expenses. However, only the cost of repairs to return the property to its original condition is allowed. Repairs made to increase durability or value cannot be claimed.

Packaging fees include the cost of purchasing packing materials for packages related to the business, the cost of shipping, and the transportation cost to the destination. However, packing materials such as cardboard and gummed tape must be purchased in quantities that are commensurate with actual use.

Energy-related expenses such as electricity and gas bills, water bills, etc. are daily expenses for running a company or store. These can be accounted for as utility expenses as money necessary for business.

Office supplies such as stationery and copy paper, and daily necessities such as light bulbs can be recorded as consumables expenses if they are used for business purposes. As a rule, items with a purchase cost of less than 100,000 yen or items with a useful life of less than one year are treated as consumables. In the case of a blue return, if the purchase cost is less than 300,000 yen, it is included in the consumables cost.

Transportation expenses and accommodation expenses for transportation to and from business partners, etc., are included in travel expenses. However, when paying for train fares, bus fares, etc. with electronic money that is also used by individuals, it must be made clear that it was used for business purposes.

In addition to telephone charges and internet provider charges, postal costs such as stamps and postcards are also communication costs. The handling of telegrams may differ depending on the company, but in general, telegrams are included in communication expenses, and congratulatory telegrams and condolence telegrams are included in entertainment expenses.

Fire insurance, earthquake insurance, and automobile insurance for company cars can be recorded as non-life insurance premiums. However, if the fire insurance is a long-term contract, even if you pay the insurance premium in a lump sum, you need to be careful because only the insurance premium for that year will be recorded every year.

Advertising expenses are the costs incurred when advertising or promoting a company or product. Specifically, it includes production costs such as leaflets, newspaper advertisements, billboards, and printing costs. In addition, the costs incurred for shop window displays at stores, etc., can be recorded as advertising expenses.

Welfare expenses are the expenses paid to all employees so that employees and their families can lead healthy and stable lives. For example, you can record the expenses incurred for events such as employee health insurance, welfare pension, company trips and year-end parties that are borne by the employer.

Newspapers, books, magazines, etc. can be recorded as expenses only if they are necessary for business. Newspaper and book expenses do not necessarily have to be paper media, and can be included if there is a cost to subscribe to e-mail magazines.

Expenses that are necessary for the business but cannot be classified into other account items are treated as miscellaneous expenses. For example, temporary expenses such as garbage disposal costs or moving expenses. Although miscellaneous expenses are a formal account item, it is better not to record too many of them, as they obscure the details of their use on the financial statements.

Basically, regardless of whether the attendee is an internal or external person, and regardless of the location or time, the cost of the meeting or meeting is the conference fee. For example, it includes the fee for using the facilities used at the conference, and the price for lunch boxes and drinks prepared at the conference.

In addition to fees associated with expenses incurred for business, consultation fees and remuneration paid to professionals and consultants are also covered. Fees include transfer fees, cash-on-delivery fees, and brokerage fees when renting an office.

Money donated to the designated destination of the Minister of Finance can be recorded as an expense, but please note that the amount that can be recorded varies depending on the donation destination. If the national or local government is a donation recipient, the full amount can be recorded, but there is an upper limit to the amount that can be recorded for other donations.

7.Summary

Because account items are not legally defined, it is important to understand the characteristics of each account, create rules, and record expenses correctly. .

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Explanation of 86 accounts and journal entry examples!

"It's still early days since I became an accountant, and I want to acquire basic knowledge firmly!" I'm in trouble."

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