What expense category does Loom fall under?

Using the right expense category for tools like Loom ensures your financial reports are accurate and helpful. Understanding where Loom fits into your expenses can streamline your financial tracking and offer better insights into your communication costs.

Classifying Loom expenses

Loom is a video messaging tool used for creating and sharing videos within teams. When categorizing Loom expenses, consider the following:

• Video communication and collaboration software: Since Loom is primarily used for video communication and team collaboration, this category is the most accurate.
• Software subscriptions: If you're grouping all software expenses together, this broader category can be used.
• Communication tools: For businesses that consolidate all communication platforms, this category is an option.

Examples of Loom expenses

Understanding how Loom expenses appear in your financial records can help you categorize them correctly. Here are some examples:

• Monthly subscription fees: Regular payments for Loom's Pro or Business plans.
• Annual subscription fees: Yearly payments that might come with a discount compared to monthly plans.
• Additional user licenses: Costs for adding more team members to your Loom account.
• Premium feature purchases: Expenses for any extra features or add-ons you buy from Loom.

For example, if your team subscribes to Loom's Business plan at $8 per user per month, and you have 10 users, your monthly expense would be $80 under the video communication and collaboration software category or software expenses category.

Tax implications of Loom expenses

When it comes to taxes, properly recording your Loom expenses can benefit your business. Here's what to consider:

• Deductible business expense: Software subscriptions like Loom are typically tax-deductible as ordinary and necessary business expenses. Keep all invoices and receipts from Loom to substantiate your deductions.
• Capital expenditures: If you pay for customized video production, editing, or consulting services through Loom, these costs may be considered capital expenditures and need to be depreciated over time.

Recording Loom under the correct expense category ensures your financial statements and tax returns are accurate. Tax laws can vary, so it's wise to consult with a tax professional to make sure you're handling these expenses correctly. By keeping these points in mind, you can make the most of the tax deductions available for your Loom expenses.

Let Ramp automate your expense process

Managing and categorizing expenses like Loom doesn't have to be tedious. Ramp can automate the tracking and categorization of your software expenses, saving you time and reducing errors. With Ramp, you get real-time insights into your spending, streamlined expense management, and peace of mind knowing your financial records are accurate.