Tax Deductions for Your Small Business
As you prepare for tax season, make sure you consider every deduction available to your business. By maxing-out allowable deductions, you can continue to build your business’s future with a little help from Uncle Sam.
Home Office: This once heavily detailed deduction has now been simplified, making claiming your home office that much easier. The new rule shaves off $5 for every 300 square foot of home office space, with a maximum allowance of 300 sq. ft. /$1500.
Auto Expenses: Tolls, parking fees and mileage that were spent for business use are all up for deduction. While many people opt for the standard rate deduction, if you can take the time and care to record keep, your detailed auto deductions usually end up being much larger.
Equipment/Supplies: This section offers you the option of either getting a full deduction for new equipment that was bought within a year, or capitalizing on the items over several years.
Education and Training: Education is only deductable if you are being educated on a topic that is prevalent to your current business. Taking up training on a completely unrelated topic does not offer a break. Also, most business owners tend to miss that educational items like trade magazines within their industry are considered deductible materials as well.
Entertainment Expenses: When picking up the tab for clients remember that entertainment expenses can be deducted up to 50%. Be sure to keep excellent records: who you met, for what business reason, where and when?
Travel: From plane tickets, to taxi fares, lodging and food, even telephone calls, trips that are mostly (majority) business related are tax deductible. Looking to mix business with pleasure? Remember, whether you bring one other person or your entire family, only your individual expenses can be deducted.
Every penny counts, don’t forget about these 10 other business deductions:
- Promotion and advertising
- Interests on loans
- Social security and insurance
- Theft losses
- Consultation fees
- Petty cash
Above all it seems the best tax preparation you can make for your business is to hire a certified accountant because your federal return is too important to leave things up to a guessing chance.
How do you prepare your small business for tax season?