The Best Tax Deductions for Your Small Business
If you are new to running a small business, you may not know all of the expenses that you can deduct when it comes to tax time. Taking advantage of these deductions can make a big difference in how much your tax bill will be when tax season comes. Some of the best tax deductions that your small business should check out include:
Vehicle expenses: Many small businesses use a vehicle to help them out. Operating that vehicle and the costs of it, for your business is a deductible. But you must have proof and records that you used that vehicle for business.
Wages and salaries: The payments that you make to employees, including their wages, salaries, commissions, bonuses, and some taxable fringe benefits (perquisites) can be deducted from your expenses.
Supplies: The cost of items that you purchased to run your business can be a deductible. They need to be used specifically for the business, else you can’t deduct them.
Rent on your business property: If you rented out a space to conduct business in, then you can deduct this amount.
Utilities: The electricity that you pay for the facility can be a deductible. You can also deduct phone costs if it is used just for the business.
Travel: If you or someone on your team travels to conduct the business, the cost of transportation and the lodging for that person is a deductible. There are some exceptions to this. For example, commuting locally on personal work is not going to count under this deduction.
Advertising: Any of the ordinary costs of advertising your business can be deductible. Home office: A portion of your personal expenses for a home office is deductible during tax time if you use it for your business. If you conduct any business there, such as working on reports, meeting with clients and so on, then you can deduct some of these things for your taxes.
Legal and professional fees: Anything that you pay for accounting or legal fees are fully deductible.
Any employee benefit programs: The costs that you incur for any of the benefit programs you offer your employees, such as retirement plans, medical insurance, and education assistance, can be deductible. For someone who is self-employed, the contributions to their own retirement plans, the ones that are qualified, can be a personal deduction too.
Claiming all the business expenses that you have will do wonders to helping you limit the amount that you need to pay during tax time. You can work with your accountant to figure out which of these, and other deductions, you can use to help keep more money in your pocket during tax time.