As a small business, any time you can save money is beneficial. The Internal Revenue Service (IRS) provides a plethora of resources to help small business owners. Small business tax deductions are designed to help you keep a little more of what you earn by claiming them on your taxes. While some may not apply to your business, those that do can be quite valuable when it comes to saving you money at the end of the year.
Advertising and Promotional Materials
While word of mouth and social media are free, other forms of advertising and promotional materials are not. In fact, they can be one of your biggest expenses. If you have to spend money to advertise, always deduct it from your taxes.
Business Meals
If one of your sales tactics is taking potential clients to lunch or dinner, remember that any meals that are related to your business can be claimed on your tactics. Even if you are away from home and need to eat while on the job, the meal will still be deductible.
Business Insurance
All small businesses should have at least some amount of insurance coverage. Business coverage has long-term benefits for the price. Its necessity makes it a viable small business tax deduction. All types of small business insurance can be claimed as deductions.
Bank Fees
Bank fees, including maintenance fees and the interest you pay on loans, are considered tax-deductible expenses. Many people forget that, even though some of these fees may be small, they will add up quickly. Don’t forget to put them on your list of deductions!
Education
Education is one of the most effective tools you can use when building a business. It is also one of the most costly. If you take just one class or end up earning a certification, all of the costs associated with your education are considered to be small business tax deductions.
Home Office Expenses
With so many people working from home, many are now able to include the cost of not only their home office but all of their supplies as well. It’s important to organize these expenses carefully so you can get the most out of each one when it comes to deducting them from your taxes.
Legal Fees
Legal fees, either from litigation, contract negotiation, or any other type of legal activity, can be claimed as tax deductions. Don’t forget to include them in your list of tax-related expenses.
Telephone and Internet
Your telephone and internet are two of your most valuable assets when it comes to your business and how you communicate with others. This includes any cell phones or hot spots you may use when you are away from the office.
Travel Expenses
If you travel for your job, you can also claim many of your travel expenses. Hotels, rental cars, flights, and your meals are all deductible from your taxes. There are some expenses that may not be included, such as concert tickets or other recreational activities. If you are unsure of whether or not to include them, you may want to discuss them with your accountant.
Depreciation on Property and Vehicles
Depreciation is a well-known tax deduction. While most people know to claim depreciation on their vehicles, they can also claim it on various types of machinery and equipment. Again, if you are unsure, this is a question your accountant can help you with.
Small business tax deductions don’t have to be confusing. Talk to your financial advisor, accountant, or even a small business lender who helps you with working capital. They can go over your expenses with you to find out what qualifies as a small business tax deduction and what does not.
