The more business tax deductions you have, the lower your taxes will be. Business tax deductions reduce the taxable income for federal, state, and local taxes; and, they can even offer you some nice benefits. They are different from tax credits which come off the amount of tax owed.
Increase your Business Tax Deductions and Save Money on Your Taxes
Listed below are just a few of the common deductions for business taxes. Each has its own set of rules on what you can and cannot claim. These rules change from time to time, and it is good to consult a tax expert to be sure your claims are legitimate.
- Auto expenses – You can either deduct your actual expenses or a standard mileage rate.
- Bad Debts – If you sell services, you cannot deduct the bill when someone doesn’t pay; however, if you sell goods, the unpaid bill is deductible.
- Startup expenses — The costs of getting a business started are deductible; like advertising, utilities, office supplies, and repairs. You may need to carry it over more than one year.
- Legal and professional expenses or DIY books — usually deductible in the year incurred with a few exceptions.
- Travel expenses – deduct the cost of your transportation, hotel, meals, etc. that are related to a business trip.
- Business entertaining – can usually be 50% deducted.
- Interest charges – deduct interest charges and carrying charges on loans and credit cards used for the business.
- Charitable expenses – donations of old equipment or checks to charities may be deductible under some circumstances.
- Moving expenses – If you move your residence because of work, you may be able to deduct certain moving expenses that would have been personal expenses.
- New equipment and software expenses – Some equipment and software can be expensed instead of capitalizing.
- Office supplies and furniture – Deduct the cost of your supplies and furniture.
- Advertising – Deduct the cost of ads, websites, mailings, business cards, or promotions of sports teams, sponsorship bulletins, etc.
- Education – If classes are related to the business, they may be deductible.
- Home office space – Deduct space, electricity, insurance, gas, and more if you can define home office space the same way the IRS does.
- Health Insurance Premiums – There are ways to make these 100% deductible if you are a sole proprietor.
- Retirement / Social Security – Self-employed? Deduct donations to SEP IRA or Keogh and half of your social security tax.
- Child Labor Costs – Deduct the cost of paying your children to work for you. You can also have them invest in a Roth IRA. Avoid Social Security tax if they are under 17.
There may be more deductions that you are eligible for that aren’t listed here.
Ask for Help with Tax Deductions
Business tax is a complicated, ever-changing field. By using our expertise at Brunsdon Law Firm keeping up with tax law is one less thing you have to do. Ask for Terri Brunsdon, who is both a lawyer and a CPA with a Master’s degree in Tax. Terri keeps up with all the latest tax changes to give you the best advice on additional tax deductions that you can claim. Contact us today to arrange an appointment for tax consultation.