Tax Deductions Every Small Business Owners should be aware of.
In a few weeks, you can put some money back into your business. This comes down to how you file your taxes.
To bring down your taxable income, here are three approaches you can use.
Auto Expenses
Are you using your personal car for your business? You can deduct a portion of the costs of keeping your car running. This requires tracking through the year of all your business-related expenses when using the vehicle. There is also a standard mileage rate for every driven mile that can be deducted. Additional expenses available for deduction are parking and toll fees. Due to the active use of the vehicle, depreciation can be deducted as well.
Professional and Legal Fees
Any fees that are payable to tax professionals, lawyers, or consultants can be deducted. If you choose to explore these services on your own and must purchase business books to do so, these can be deducted as a business cost.
Promotion and Advertising
Your deductible current expenses within this category may include website development, paid online marketing, and business stationery such as business cards. If your business does any sponsorships, if there is a direct connection between the business and the sponsorship, a deduction can be made.
Bad Debt
Bad debts should clearly appear as a business debt and proof if efforts have been made to retrieve them. Bad debts may include credit sales, loans, and even business-loan guarantees.
Insurance
There are a number of insurance policies that you take out as a business. These include health insurance, property insurance, workers’ compensations costs, life insurance for employees, auto insurance, and more. All these policies are 100% deductible.
Taxes
Yes! Even the taxes that you incur while running your business are deductible. Some of these taxes include state income tax, employment taxes (the employer’s share), real estate tax for business premises, sales tax on items purchased for operations, and more.
Small business owners have plenty more opportunities for tax deductibles. To find out how much you can save, book a discovery call with RCN CPAs & Business Advisors.
