Disclaimer: This is not legal advice, but advice on things that can be presented to a CPA when filing, organizing and discussing your possible expenses and deductions.
Recruitment advertising: If you paid to post a job ad online, in a newspaper, on the radio, online job boards those advertising expenses are tax deductible.
Job/career fair costs: If you paid to have a booth at a job fair, campus hiring event or industry networking mixer be sure to present these costs to your CPA as these are tax deductible.
Annual dues: Any dues or costs associated with industry organizations, such as the society of Human Resource Management, Staffing Industry Analysts, etc.
Education/Certifications: Any training courses or seminars, certifications or classes/conferences.
Website expenses: Hosting and domain registration fees, site development, design/redesign expenses.
Internet expenses: Monthly fees for Internet expenses.
Phone expenses: Any phone expenses related to your business.
Office Supplies: If you have small office and buy copy machine, fax, paper expenses, coffee, soda or other supplies (plates, cups, etc.) these should be discussed with your CPA.
Insurance policies: Some staffing firms provide insurance policies, such as an umbrella policy or workers’ compensation policy.
Legal and tax fees: Did your company negotiate a non-compete or consult with a legal/tax professional for any reason that were related to the business?
Home office expenses: IRS offers you a new “simplified method” for computing your home office deduction at $5 a square foot with a maximum of 300 square feet. Consult with your CPA for details.
Office leasing/rent: These expenses are tax deductible.
Start-Up Costs: If a recruiting firm just started, they are often not aware that any expenses that are incurred before the first sale are called “start-up costs”. These costs cannot be deducted until the first sale. Then they are deducted over 15 years and you can elect to deduct the first $5,000 in the first year of business. Careful tax planning is needed in this area. Many small businesses assume they can deduct all of their costs in starting a new business but they cannot until they have their first sale. Then costs are deductible based on the laws for that deduction.
Employee vs. contractor: If you’re a staffing firm that hires and pays employees, the biggest thing to watch for is paying people correctly – are they employees vs. independent contractors points.
Remember, each state has its own unique tax laws and rules, and laws change every year. That’s why it’s best to consult with a licensed tax professional to make sure your business taxes advantage of all available tax deductions while also ensuring things are done professionally and legally.